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DTN Midday Grain Comments 05/25 10:51
Corn, Soybean, Wheat Futures Lower at Midday
Corn futures are 5 to 7 cents lower at midday Wednesday; soybean futures are
12 to 18 cents lower; wheat futures are 20 to 23 cents lower.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
The U.S. stock market is firmer with the S&P up 20 points. The U.S. Dollar
Index is 35 points higher. Interest rate products are firmer. Energies are
mixed with crude down .25 and natural gas up .40. Livestock trade is mostly
higher with front-month hogs leading. Precious metals are weaker with gold down
18.00.
CORN:
Corn futures are 6 to 8 cents lower at midday with trade fading into fresh
lows for the move before firming back a bit toward midday with broad ag
weakness on a lack of fresh bullish news and a weaker trend overall. The daily
export wire has been quiet while basis shows some signs of life again in spots.
The ethanol margins look to remain rangebound near term with the weekly report
showing production up by 23,000 barrels per day (bpd), to two-month highs, with
stocks down by 79,000 barrels getting us to four-month lows. The second crop in
Brazil will head for the homestretch while the U.S. weather continues to keep
moisture in much of the Corn Belt with cooler weather through midweek. On the
July contract chart, we have resistance at the 20-day moving average at $7.92
with the lower Bollinger Band at $7.60 as support, which we bounced back from a
test of early in the session.
SOYBEANS:
Soybean futures are 12 to 18 cents lower with soft spread action as trade
follows the other ag comodities lower with little fresh bullish news and
sliding product values to limit upside. Meal is $4.50 to $5.50 lower and oil is
95 to 115 points lower with meal struggling to hold the recent momentum. South
America is moving toward post-harvest footing at this point. U.S. planting will
remain sluggish with the expected moisture this week; cool down slows emergence
until the second half of the week. Basis has held strength well at processors
and exporters. On the July soybean chart, we are still solidly above the 20-day
moving average at $16.53 with the upper Bollinger band at $17.23 the next round
up.
WHEAT:
Wheat futures are 20 to 23 cents lower at midday with long liquidation
continuing as trade fades into nearby support levels before bouncing somewhat
with great hopes of European crop stabilization weatherwise and hopes for
greater world export movement despite the ongoing Ukraine/Russia war with
Russia offering grain for sanction reductions. The U.S. dollar is bouncing back
a little as well. Warmer weather is expected to return later this week to push
maturity again with spring wheat progress likely to continue to struggle. KC
wheat is back to a 42-cent discount to Minneapolis in wider action, and at an
85-cent premium to Chicago, firming a bit. The KC July chart has resistance at
the Upper Bollinger Band at $13.76, with the 20-day moving average well below
the market at $12.15, which we are trading at currently with the lower
Bollinger Band still well below current action at $10.50.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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