DTN Midday Grain Comments 08/19 11:00
Corn, Beans Lower at Midday
Grain trade is mixed at midday with the higher protein wheat leading the
upside and beans the downside.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow up 60. The interest
rate products are mixed. The dollar index is 27 higher. Energies are mixed with
crude oil down 0.60. Livestock trade is mixed. Precious metals are lower with
gold down $4.
Corn trade is 2 to 4 cents lower at midday with light selling dominating the
early trade due to the negative chart action yesterday and good yield comments.
The crop tour continues to move along with generally good potential being
found. The warmer weather this week should help to advance maturity ahead of
the cool down next week. Ethanol margins remain solid, but weaker energy prices
have trimmed margins a bit. The weekly crop progress report listed 70% of the
crop in the dough stage versus the 63% average and 22% is dented versus the 27%
average and 10% last year. Illinois was noted at 34% dented. Crop ratings
slipped 1 percentage point to 72% good to excellent which is still up from 61%
last year. That is neutral versus expectations but seasonally declining
conditions is normal, and considering we are now in the back half of August,
ratings over 70% good to excellent are historically exceptional. On the
December chart support is at $3.70 where we find both the 10-day and 20-day
moving average and we are just below that area at midday. Further support is at
the low at $3.58.
Soybean trade is 5 to 15 cents lower at midday following a ratings increase
Monday afternoon. The September contract again gaining on new crop. Meal is $5
to $6 higher, and oil is 40 to 50 points lower. Early pod counts have been
mixed on the crop tour with more room for the weather to influence yields.
Weather looks improved for soybeans in the near term but the rain will have to
fall soon in some of the areas. Old-crop supply tightness should keep the
September contract active, but expectations for a big new crop harvest has
limited upside bounces. The weekly crop progress report listed 83% of the crop
setting pods versus the 79% average and 70% last year. The weekly soybean
conditions improved by 1 percentage point to 71% good to excellent; this is up
from 62% last year. On the chart trade will need to get positive closes above
the 10-day moving average at $10.65 and $10.72 to turn the chart more positive.
Support is at the $10.38 low printed on last week; expect sell stops below this
Wheat trade is 4 to 11 cents higher across the three contracts at midday
with the higher-protein grades leading the upside due to quality concerns. The
dollar remains near one-year highs keeping pressure on commodities in general,
but if wheat can overcome the strength for a positive finish today it will be
encouraging. The Russian/Ukraine situation has been quieter, but that can
change at any moment. The weekly crop progress report listed 17% of the spring
wheat harvested versus the 33% average; some rains had harvest activity slow
today. The crop condition did slip by 2 percentage points to 68%. Support is
the $6.00 area on the Kansas City chart again with the Chicago contract back
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Trading Advisor. He can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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