DTN Midday Grain Comments 08/22 11:03
Grains Mixed at Midday
Wheat leads mixed trade at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow 20 lower. The dollar
index is 9 points lower. Interest rate products are firmer. Energies are weaker
with crude down $0.40. Livestock trade is mixed with cattle leading. Precious
metals are weaker with gold 6.30 lower.
Corn is narrowly mixed with trade trying to build on the solid close
yesterday with two-sided trade so far. Weather should continue to remain a
short-term non-issue as the crop tour wraps up today, with few surprises found
so far. Ethanol margins remain poor with blenders in the best position
currently, with more plants likely to be idled with rumors of the refinery
waivers to be reversed. Basis remains mixed overall with harvest getting
closer. Weekly export sales remain soft at 119,300 metric tons old crop, and
301,600 of new crop. On the September nearby chart support is likely the $3.59
low with the lower Bollinger Band at $3.47 below that with resistance the
10-day at $3.70.
Soybean trade is narrowly mixed with trade again trying to find some buying
support at the lower end of the range and to finally put two positive finishes
in a row together with early strength evaporating again. Meal is 0.50 to 1.50
higher, and oil is 5 to 15 points lower. Crush margins remain positive overall,
with oil staying towards the upper end of the range. Basis remains flat
overall. The Brazilian real is trying to firm off the lows again, with local
prices an effective premium to much of the US. The weather looks to be a
short-term non-issue for soybeans as well coming forward. The trade situation
remains little changed as well. Weekly export sales showed some improvement at
25,900 metric tons of old crop, 792,600 metric tons of new crop, 118,600 metric
tons of old meal, 13,400 of new meal, and 2,200 of oil. September chart support
is the lower Bollinger Band at $8.42, with the next round up the 10-day $8.65
which we tested again today.
Wheat trade is 2 cents lower to 3 cents higher at midday with light buying
with all contracts trying to shake off oversold conditions. The Kansas
City/Chicago spread is at 75 after a high of 90 cents last week and a low of 71
cents this week with Kansas City gaining slightly overnight. The corn/HRW
spread is wider, back to 27 cents. Kansas City wheat is now back to competitive
on the world market trading as well as into feed rations. Spring wheat harvest
should expand with winter wheat just about wrapped up, with Europe progressing
as well. The dollar remains near the upper end of the range, limiting upside
potential. Weekly export sales showed improvement at 594,600 metric tons. The
September Kansas City chart support is the new low at 3.80 3/4 with the first
resistance the 10-day at $3.91 which we are just below.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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