DTN Midday Grain Comments 07/01 10:48
Grains Lower at Midday
Corn trade is 7 to 11 cents lower; beans are 44 to 57 cents lower and wheat
is 36 to 40 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the DOW down 75 points. The dollar
index is 70 points higher. Interest rate products are higher. Energies are
firmer with crude up 2.20. Livestock trade is firmer. Precious metals are
weaker with gold flat.
Corn trade is 7 to 11 cents lower at midday with two-sided trade as selling
in soybeans and wheat drags trade off early gains with position squaring and
fund liquidation heading towards the long weekend. Trade will continue to watch
the forecast with more focus on corn pollination temperatures as we push into
July with the back of the forecast looking warmer with better short-term rains
expected for many, especially this weekend. On the report, numbers were in line
with expectations are 4.436 billion bushels on hand vs. 4.434 expected and
acres at 89.921 million vs. 89.861 expected. The export wire will need to show
value buyers picking up bushels on the break with nothing on the daily report
yet. The ethanol margins are likely to remain rangebound with strong blender
margins remaining in place with unleaded rebounding a bit. Basis remains solid
through most of the Corn Belt, with most place moving their bids to the
September contract. On the September chart, support is the fresh low at $6.16
1/2 with lower Bollinger Band just above that at $6.28 1/2, with the 20-day
well above the market at $7.00.
Soybean trade is 44 to 57 cents lower at midday with broad selling
accelerating as funds liquidate after trade failed to hold post report strength
on the sharply lower acre number at 88.325 million vs. 90.446 expected with
weather threats remaining limited short term. Mea1 is 12.00 to 13.00 lower and
oil is 160 to 180 points lower. Also on the report, stocks were 971 million
bushels vs. 965 million expected. Bio-diesel margins are very good at the
moment which should bolster crush recovery into fall with fresh capacity
expected to come online then although futures targets are up in the air with
yesterday's Supreme Court ruling. South America is moving towards post-harvest
footing at this point with planting wrapped up for the full season in the US,
and getting started on double crop with wheat harvest moving quickly with
moisture needed to boost development. Basis is fading a bit at processors and
exporters in recent days with the daily wire remaining quiet. On the August
soybean chart support is the lower Bollinger Band at $14.94 with the 20-day
well above the market at $15.98.
Wheat trade is 36 to 40 cents lower at midday with continued harvest
pressure and spillover pressure keeping selling rolling with no surprises on
the report with 660 million bushels on hand vs. 655 expected, and acres at
47.092 vs. 47.017 expected. Plains weather should allow for harvest to continue
moving with few areas slowed by rains. The dollar continues to hold in the
upper end of the range with the strong ruble helping competitiveness as well
with Russia expected to have near-record supplies with other Black Sea supply
diminishes short term with trade waiting for the next set of import tenders.
The KC September chart has support at the fresh low at $9.09 scored this
morning with the lower Bollinger Band at $9.13 and the 20-day still well above
the market at $10.80.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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