DTN Midday Grain Comments 08/23 10:58
Corn, Beans Lower at Midday
Wheat is clinging to small gains at midday, with row crops turning lower.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow futures down 55 points.
The interest rate products are higher. The dollar index is 31 lower. Energies
are mostly mixed with crude up 0.40. Livestock trade is lower. Precious metals
are mixed with gold up $3.30.
Corn trade is 2 to 3 cents lower with trade making new contract lows this
morning after early gains failed to hold with better-than-expected-yield
results this a.m., and the soybeans failing to hold their gains. The weekly
ethanol report showed production 0.66% lower, and stocks were 1.46% lower, and
gasoline demand was 1.12% higher. Ethanol futures have edged lower with summer
driving season winding down. The crop tour will move deeper into the belt today
with Nebraska pegged at 163, and Indiana was 171 with mixed results in Illinois
so far, and some better ones in Iowa. On the December chart support is the new
low at $3.57 1/2 made this morning that is a new contract low. Basis has been
mostly steady with late bushels expected to move soon. Resistance is at the
10-day moving average at $3.67.
Soybean trade is 1 to 4 cents lower with trade failing to hold the early
spike on the biodiesel tariff announcement on Argentina with the crop tour
moving on today and a drier forecast after the recent rains. Meal is $2 to $3
lower and oil is 45 to 55 points higher. Rain coverage was good yesterday, but
drier near term weather and cooler weather will likely offset each other in the
near term. The crop tour found lower pod counts so far, but that doesn't always
translate to lower yields. Basis has been steady to firmer with demand holding
up pretty well in the near term. China cancled 640,970 of old-crop sales, but
that was partially offset by 295,200 metric tons to unknown on new crop. On the
November chart support is the 10-day at $9.36 which we have edged below at
midday with the recent low below that at $9.21, with the 20-day at $9.56 as
Wheat trade is flat to 4 cents higher at midday with light buying, with
trade hanging on despite row crop weakness and the recent pattern for fund
selling to come in during the day session. Russian harvest continues to make
good progress which will keep pressure on for now with production estimates
still working higher. The dollar rally has faded once again moving back towards
the lower end of the range. Trade is heavily oversold, which should translate
into bigger short covering at some point ahead of winter wheat planting. On the
December Kansas City contract support is the $4.25 fresh low with resistance at
the 10-day at $4.48.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Advisor.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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