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DTN Midday Grain Comments 06/17 10:48
Corn and Soybeans Deep in the Red Midday Thursday
Corn is 20 to 22 cents lower up front and 17 to 19 cents lower on new crop;
soybeans are 38 to 40 cents lower with flat spreads, and wheat is 12 cents
lower to 1 cent higher.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
The U.S. stock market is mixed with the Dow down 220 points. The U.S. Dollar
Index is 0.60. Interest rate products are higher. Energies are weaker with
crude down $0.90. Livestock trade is mixed with feeder cattle leading.
CORN:
Corn trade is 20 to 22 cents lower up front and 17 to 19 cents lower on new
crop with spreads softening at midday. Early strength with spillover from
soybeans, some rains and lackluster exports, along with the sharply stronger
dollar, is keeping pressure on at midday. Ethanol margins are seeing support
from corn values, but concerns about blending rates will limit upside. Brazil
weather looks mostly unchanged short term as the crop advances toward harvest
with some late rains. Meanwhile, U.S. weather will be watched for consistency
in the second week forecast while heat will be the rule of many the next few
days with some better than expected Iowa rains overnight. Corn basis should
remain flat to weaker near term with more attention going to new crop. Weekly
export sales were soft at 18,000 metric tons of old crop and 276,100 metric
tons of new. On the July contract, trade is back below the 20-day at $6.67 with
the late strength Wednesday holding, with the lower Bollinger Band at $6.28.
SOYBEANS:
Soybeans are 38 to 40 cents lower at midday with big soy oil liquidation
leading trade down. There is little fresh news otherwise and little other
bullish news to boost trade as we get more oversold. Meal is $1.00 to $2.00
lower and oil was 3.80 cents to 4.20 cents lower. The weather pattern should
allow for short-term stress to give way to rains in the center of the belt.
South America should continue to see shipping progress short term, with U.S.
basis soft with processors and exporters softening bids recently. Weekly export
sales remain soft at 65,300 metric tons old and 6,500 new; 177,300 of old meal
and 7,800 of new, with 2,200 of oil. On the July soybean chart, support is
$14.00, with the lower Bollinger Band resistance at $14.36, which are solidly
below.
WHEAT:
Wheat trade is 12 cents lower to 1 cent higher with spring wheat leading on
weather concerns with spillover from row crops, the stronger dollar and harvest
pressure limiting winter wheats. The dollar is attempting to consolidate at
over 91 points on the index post Fed, which will work to limit upside if
sustained with more consistent action later in the week. Warmer weather this
week should help to bring winter wheat along after the slow down last week with
early harvest getting underway on the far Southern Plains. Other Northern
Hemisphere weather will continue to be watched as well with little fresh news
on the front with Russia mostly OK for now. KC continues at a 56-cent discount
to Chicago widening a bit, with Minneapolis at a 107-cent premium. Weekly
export sales were soft at 287,100 metric tons range. KC July on the chart has
resistance the 20-day at $6.25 with support at the lower Bollinger Band at
$5.97.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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