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DTN Midday Grain Comments 08/11 10:54
Corn, Soybean, Wheat Futures Higher at Midday
Corn futures are 6 to 7 cents higher at midday Thursday; soybean futures are
19 to 21 cents higher; wheat futures are 13 to 16 cents higher.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
Corn futures are 6 to 7 cents higher at midday Thursday; soybean futures are
19 to 21 cents higher; wheat futures are 13 to 16 cents higher. The U.S. stock
market is higher with the DOW up 180 points. The U.S. Dollar Index is 15 points
lower. Interest rate products are mixed. Energies are firmer with crude up
1.00. Livestock trade is firmer. Precious metals are mixed with gold $10.00
lower.
CORN:
Corn futures are 6 to 7 cents higher at midday with trade continuing to see
buying and firm spread trade as we work to balance weather and demand ahead of
the Friday WASDE report with the short-term uptrend still intact. Short-term
forecasts show drier weather for most in the near term with warmer-than-normal
temperatures for the center and western parts of the Corn Belt with moderation
expected the second week along with some better showers in the west. Weekly
export sales remained soft at 191,800 metric tons (mt) of old crop and 191,300
mt of new crop. Ethanol margins will continue to be limited by driving demand
and seasonal slowdowns with unleaded futures bouncing off six-month lows to
crimp blending margins if sustained into fall. Basis will be watched to see how
much further strength fades, especially with the board rally and harvest starts
in the South. On the WASDE report, yield is expected to come in at 175.9
bushels per acre (bpa) with trade looking for demand cuts to balance the yield
decrease, keeping carryout at 1.510 billion bushels (bb) for new crop.
September chart support is the fresh low at $5.61 1/2 scored two weeks ago with
the lower Bollinger Band just below that at $5.60, with trade holding back
above the 20-day moving average at $6.01 and the upper Bollinger Band is the
next round up at $6.32, which we are holding just below.
SOYBEANS:
Soybean futures are 19 to 21 cents higher at midday with trade working
higher with flat to soft spread trade after we reversed off the highs Wednesday
on improved forecast ideas with volatile back and forth trade likely to
continue. Meal is $7.50 to $8.50 higher and oil is 150 to 160 points higher. On
the WASDE report trade is looking for an average yield guess of 51.1 bpa, down
just slightly from July with carryout at 226 million bushels (mb), remaining
tight. Biodiesel margins remain positive but narrowing in recent days. South
America is on post-harvest footing for shipping with their advantage to persist
until September, while the bulk of the U.S. is heading into the start of
pod-fill season with warmer and drier weather for much of the belt this week
before moderating the next with mixed rain potential. Basis is fading a bit at
processors and exporters in recent days as early harvest in the south draws
closer. Mexico bought 104,300 mt of meal on the daily wire with weekly sales
soft at -66,700 mt of old crop; 477,200 mt of new; products mixed on 90,900 mt
of old-crop meal; and 311,200 mt of new meal; 600 of oil. On the September
soybean chart support is the 20-day moving average at $14.21, which we are well
above, with the upper Bollinger Band at $15.42, which we failed to hold above
Wednesday.
WHEAT:
Wheat futures are 13 to 16 cents higher at midday with trade working to hold
above resistance after the strong close Wednesday and little fresh news. Plains
weather looks warmer and drier this week with moisture needing to be built
before planting time with the second week looking better, while spring wheat
sees heat with harvest hitting full stride short term. The dollar is fading
further from the recent highs as the pace of inflation showed easing Thursday
morning along with Black Sea potential still being watched as ships continue to
trickle out of Ukraine. Weekly export sales were rangebound at 359,220 mt. The
KC September chart had resistance at the 20-day moving average at $8.59, which
we closed solidly above with trade looking to see if action can consolidate,
with the upper Bollinger band at $8.94 the next round up.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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