DTN Midday Grain Comments 05/20 10:56
All Grains Higher at Midday
Broadly firmer trade on weather concerns to start the week.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow 65 points lower. The
interest rate products are firmer. The dollar index is 6 lower. Energies are
mostly higher with crude up 0.45. Livestock trade is weaker after early mixed
trade. Precious metals are lower with gold up 1.50.
Corn trade is 5 to 7 cents higher at midday with the wetter forecast
continuing to add support ahead of the planting progress report this afternoon.
Wet weather is expected to remain in place for much of the western and central
Corn Belt. Ethanol margins are narrowing fast with ethanol futures unable to
keep pace with the corn rally even as it moves closer to $1.38 a gallon. Basis
has seen selling pressure from farmer movement. The weekly export inspections
softened a bit at 820,916 metric tons. On the weekly crop progress report,
trade will be watching to see how close we are to 50% complete. On the July
nearby chart support is the 200-day at $3.86 3/4 that we moved through
overnight with the next level of resistance the day high at $3.91 1/2, then
Soybean trade is 10 to 12 cents higher with trade rebounding from selling on
Friday with support from the grains and weather. Meal is $2.50 to $3.50 higher
and oil is 25 to 35 points higher. Crush margins remain solidly positive
overall with meal still looking to reconsolidate above $300. South American
currencies remain cheap at the end of harvest, but rising basis is helping U.S.
offset somewhat. Field work should generally remain slow in the near term but
more progress is likely into next week with little incentive for farmers to
push right now along with acres possibly shifting to corn or milo. Trade talks
are expected to continue, but little progress is expected in the near term
along with further talk about trade aid. Weekly export inspections remain slow
at 497,070 metric tons. Weekly crop progress will be expected to show planting
well behind normal. The July chart support is the $7.96 lower Bollinger Band
with the $7.91 low below that, and the resistance the 10-day at $8.24, which we
are back above at midday, with the next round the 20-day at $8.24.
Wheat trade is 10 to 17 cents higher with Kansas City trade leading as the
spread vs. Chicago continues to reverse with trade moving from 51 to 43 cents
the last couple of trading sessions. Europe and the Black Sea area will be
watched with dryness in the Volga Valley, and wet weather in the U.S.
potentially limiting planting and causing disease issues in the winter wheat.
The dollar remains rangebound. Hard red wheat is working into feed rations in
some areas with the bounce in corn values with the wheat rally looking to
change that. The weekly export inspections were strong again at 757,704 metric
tons. The weekly crop progress report is expected to show steady conditions and
lagging maturity with spring wheat progress closer to normal, with challenging
near-term conditions. On the July Kansas City chart, support is the 50-day we
moved through overnight with the 100-day at $4.64 the next round up.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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