DTN Midday Grain Comments 08/20 11:13
Grains Trending Lower at Midday
Broadly weaker grain trade at midday after early gains fade.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow 45 lower. The dollar
index is 9 lower. Interest rate products are weaker. Energies are weaker with
crude down $0.40. Livestock trade is sharply higher. Precious metals are mixed
with gold 1.20 higher.
Corn is 4 to 5 cents lower at midday with initial overnight gains giving way
to broad selling again as long liquidation continues with little fresh demand
news to support action and no surprises on the crop tour. Weather should
continue to remain a short-term non-issue as the crop tour moves through
Nebraska and Indiana today. Ethanol margins remain poor with blenders seeing
the most short-term benefits with ethanol futures drifting lower. Basis remains
mixed overall with harvest getting closer. Weekly crop progress showed
conditions 1% lower to 56% good to excellent, 14% poor to very poor, 95% silked
vs. 99% on average, 55% in the dough vs. 76% average, and 15% dented vs 30% on
average. On the September nearby chart support is likely the $3.59 low with the
lower Bollinger Band at $3.54 below that with resistance the 10-day at $3.80,
reflecting the break.
Soybean trade is narrowly mixed with overnight strength fading on spillover
pressure from the corn and wheat action. Meal is 1.00 to 2.00 higher and oil is
20 to 30 points lower. Basis remains flat overall. The Brazilian ral gave up
its recovery and remains near the bottom, along with the issues in Argentina.
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 crop
progress showed conditions 1% lower to 53% good to excellent, 14% poor to very
poor, 90% blooming vs. 96% on average, and 68% setting pods vs. 85% on average.
September chart support is the lower Bollinger Band at $8.42, with the next
round up the 10-day $8.65.
Wheat trade is 1 to 8 cents lower with selling again resuming during the day
session. The Kansas City/Chicago spread is at 73 after a high of 90 cents last
week. The corn/HRW spread is narrower, back to 25 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 continuing to move towards spring wheat harvest as
well. Weekly crop progress showed winter wheat 93% harvested vs. 98% on
average, with spring wheat 16% harvested vs. 49% on average, and 70% good to
excellent, and 7% poor to very poor, down 1%. The September Kansas City chart
support is the new low at 3.80 3/4 with the first resistance the 10-day at
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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