DTN Midday Grain Comments 08/22 11:03
Corn, Beans Lower at Midday
Broad selling at midday except for wheat.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow 380 lower. The dollar
index is 40 points lower. Interest rate products are lower. Energies are weaker
with crude down 1.50. Livestock trade is sharply lower. Precious metals are
mixed with gold 27.30 higher.
Corn is 3 to 4 cents lower with choppy trade continuing amid fresh
intensification of the trade war. Weather should continue to remain a
short-term non-issue with continued cool weather the biggest concern at this
point. 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 again refuted. Basis remains mixed overall with harvest
getting closer. On the September nearby chart support is likely the $3.57 1/2
low with the lower Bollinger Band at $3.47 below that with resistance the
10-day at $3.65.
Soybean trade is 8 to 11 cents lower with early buying disappearing again
with trade slipping further into the lower end of the range amid the trade war
intensification. Meal is 2.00 to 3.00 lower, and oil is 15 to 25 points lower.
Crush margins remain positive overall, with oil staying towards the upper end
of the range, and meal finding support at $2.90. Basis remains flat overall.
The Brazilian real is at the lows again with the dollar strength, ensuring
strong prices to domestic producers there, even with the midday dollar
reversal. The weather looks to be a short-term non-issue for soybeans as well
coming forward. The trade situation remains little changed as well. September
chart support is the lower Bollinger band at $8.41, with the next round up the
10-day $8.61 which we tested again today.
Wheat trade is narrowly mixed at midday with trade seeing light choppy
action after the strong finish yesterday. The Kansas City/Chicago spread is at
78 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
31 cents. Kansas City wheat is now back to competitive on the world market
trading as well as into feed rations, although that has faded in recent days.
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. The September Kansas City chart support is
the new low at 3.80 3/4 with the first resistance the 10-day at $3.89 which we
are just above at midday, and the 20-day at $4.06.
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
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.
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