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DTN Midday Grain Comments 06/09 10:46
Soybean Futures Higher at Midday; Corn, Wheat Lower
Corn futures are 6 to 8 cents lower at midday Friday; soybean futures are 11
to 21 cents higher; wheat futures are 1 to 10 cents lower.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
Corn futures are 6 to 8 cents lower at midday Friday; soybean futures are 11
to 21 cents higher; wheat futures are 1 to 10 cents lower. The U.S. stock
market is firmer with the S&P up 8. The U.S. Dollar Index is 15 points higher.
Interest rate products are weaker. Energies are mixed with crude .05 higher and
natural gas off .05. Livestock trade is mostly higher. Precious metals are
firmer with gold up 1.50.
CORN:
Corn futures are 6 to 8 cents lower at midday with softer spread action as
we remain rangebound ahead of the WASDE report and weekend rains and forecasts.
Ethanol margins should remain solid in the near term, with unleaded holding
recent gains with fading basis more favorable for summer production. On the
USDA report, traders are looking for old-crop carryout at 1.449 billion bushels
(bb) up slightly from last month, with new crop at 2.254 bb, also up slightly
with yields expected to remain at trendline. Basis continues to hold a softer
tone with most users bidding off December at this point. The second crop in
Brazil heads toward the homestretch with some recent rains, and a cold front
that could hurt some of the last-planted corn in the coming days. On the July
chart we have support at the 20-day moving average at $5.89 with the recent
high at $6.14 hanging above the market.
SOYBEANS:
Soybean futures are 11 to 21 cents higher at midday with firmer spread
action as we score fresh highs for the move pre-report with oil leading the
product complex. Meal is $4.50 to $5.50 lower and oil is 175 to 195 points
higher. The daily export wire saw sales of 197,000 metric tons (mt) old crop to
unknown. On the report, trade will be looking for 223 million bushels (mb) of
old-crop carryout and 345 mb of new, up slightly from last month, with
trendline yields. Basis will likely remain a little softer with most buyers
rolling to the back months. Planting should be on the homestretch nationally
with the east remaining drier in the short term before broader rains should
boost emergence over the weekend on the later-planted acres. July chart support
is the 20-day moving average at $13.43, which we closed solidly above, with the
Upper Bollinger Band well above the market at $13.96.
WHEAT:
Wheat futures are 1 to 10 cents lower with Chicago leading as the
intra-contract spread action remains very active. There is notable volume in
Chicago pre-report with little other fresh news. On the report, trade is
looking for old-crop carryout at 606 mb, up slightly, and new crop at 569 mb,
also up slightly. Warmer weather may stress spring wheat in the short term, but
otherwise we are caught up after the slow start. Plains harvest should pick up
around rains this weekend as well, keeping us near an average pace there. There
are some concerns with the longer term weather pattern for Australia. The
dollar is just off the recent highs, with Matif wheat holding solidly higher.
On the KC July chart, the $8.00 level, which we have tested this morning
remains resistance, with the lower Bollinger band at $7.61 as support.
**
Join us for DTN's webinar at 12:30 p.m. CDT Friday as we go through the
numbers, discuss what they mean for prices and hear DTN Lead Analyst Todd
Hultman's take on which estimates are reasonable and which are not. We also
welcome and make time for questions. Register here for Friday's June WASDE and
Crop Production reports webinar: https://www.dtn.com/wasde-webinars
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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