DTN Midday Grain Comments 05/19 10:51
Soybean Futures Higher at Midday; Corn Mixed; Wheat Lower
Corn futures are 2 cents lower to 4 cents higher at midday Thursday; soybean
futures are 14 to 28 cents higher; wheat futures are 14 to 22 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the S&P down 25 points. The U.S. Dollar
Index is 95 points lower. Interest rate products are firmer. Energies are
firming back from early lows with crude up .25 and natural gas up .07.
Livestock trade is mixed. Precious metals are firmer with gold up 29.50.
Corn futures are 2 cents lower to 4 cents higher with strong spread action
as we have firmed off the overnight lows during the day session as outside
market spillover moderates. The export wire has been quiet with trade looking
for when value buyers start to show up again while basis remains flat. Weekly
export sales were a little better than expected at 435,300 metric tons (mt) of
old crop and 588,500 mt of new. Ethanol margins will continue to be squeezed by
input costs with soft driving demand and still burdensome stocks in the short
term into late spring. The second crop in Brazil will head for the homestretch
with drier weather in much of Brazil with some potential early frost threats
short term. U.S. weather remains challenging for many in the short term with
cooler weather to the north limiting drying while warmer weather to the south
will boost crop development. On the July contract chart, we have resistance at
the 20-day moving average at $7.96 with the lower Bollinger Band at $7.68 as
Soybean futures are 14 to 28 cents higher at midday with firmer spread
action as meal works to rebalance crush margins as oil values moderate and we
press back towards the $17.00 area up front. Meal is $10.00 to $11.00 higher,
and oil is 70 to 80 lower with pressure as Indonesia starting lift export
restrictions. South America is moving toward post-harvest footing at this
point, with planting in the U.S. to continue to progress well in some areas.
New-crop November is gaining against corn this morning, with time running short
to hold acres. Weekly export sales were mixed with 752,700 mt of old crop and
149,500 mt of new; meal export sales were at 293,100 of old. On the July
soybean chart we are just above the 20-day moving average at $16.49 with the
$17.00 area as the next level of resistance.
Wheat futures are 14 to 22 cents lower at midday with active, two-sided
action again overnight and into the day session as trade works to settle into a
range after the surge to new highs. There has been little change to Plains
weather and the UN is leading attempts to restart grain exports out of the
Black Sea area with little substantial progress so far. The dollar has faded
off the top of the range as well. Warmer weather is helping maturity to catch
up a bit, while the Kansas wheat tour finds generally disappointing yields with
the average below 40 bushels per acre (bpa). Weekly export sales were mixed at
8,500 mt of old crop and 325,600 mt of new. KC wheat is back to a 34-cent
discount to Minneapolis in wider action, and at a 96-cent premium to Chicago,
firming a bit. The KC July chart has resistance at the fresh high of $13.79,
with the open gap below the market at $12.92 filling overnight with the 20-day
moving average well below the market at $11.97.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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