DTN Midday Grain Comments 07/31 11:35
Corn Down, Beans Higher at Midday
Grain trade is mixed at midday with the market appearing to be waiting on
the moisture event Sunday into next week.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow down 190. The interest
rate products are mixed. The dollar index is 3 higher. Energies are mostly
lower with crude oil down $0.88. Livestock trade is mixed with feeder cattle
sharply lower. Precious metals are lower with gold down $9.
Corn trade is 3 to 4 cents lower at midday staying in the trading range of
this past week and just off the fresh contract lows. Basis remains sideways
with ethanol margins seeing light pressure although sot margins remain very
good historically. The weather forecast remains mostly cool and mostly dry in
the near term with a moisture pick-up expected next week. December contract
support remains at the recent $3.64 low, with the 10-day moving average at
$3.72 first resistance. If the weather would give us a rally expect greater
sell stops to be sitting above the gap in the $3.78-3.80 area. The weekly
export sales were disappointing on old crop at 173,800 metric tons, but good on
new crop at 1.09 million metric tons.
Soybean trade is 2 to 6 cents higher at midday, with the August trade up a
dime as it goes towards delivery. Meal is $2 to $3 higher and oil is 10 to 20
points higher. Weather is expected to remain cool and dryer than normal this
week, with little rain showing for most of the belt in the next five days.
Beyond that, moisture expectations remain mixed, with heat up ticking in the
western part of the belt this weekend. Once rains come, it will likely renew
the selling pressure on the market, but support should be evident in the
meantime. The weekly export sales were good with 187,400 metric tons of old
crop, 1.27 million metric tons of new crop, 43,700 of old crop meal, 707,400 of
new crop meal, 12,800 of old crop bean oil, and 20,000 of new crop bean oil. On
the November chart, we closed below all major moving averages; the contract low
of $10.55 is support. Chart resistance is at the $10.84 10-day then the $10.95
20-day moving average.
Wheat trade is mixed at midday, with the Kansas City contract showing the
most strength. Spread trade has firmed today indicating commercial buying.
World wheat weather remains mostly a non-issue for now with a few trouble spots
still lingering. Wheat needs a demand story to take it out of its oversold
chart conditions unless the row crops find a reason to rally and give wheat
some spillover support. The weekly export sales were good at 801,000 metric
tons. On the September Chicago chart resistance is at the $5.32 10-day, then
the $5.41 20-day. Support is at the fresh low printed yesterday at $5.18 1/2.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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