DTN Midday Grain Comments 05/26 11:36
Corn, Wheat Lower at Midday
Wheat is sharply lower at midday, pulling corn lower.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow index down 170. The
interest rate products are mostly lower. The dollar index is 108 points higher.
Energies are lower, crude is down 1.50. Livestock trade is mixed with feeder
cattle leading. Precious metals are lower with gold down $16.
Corn trade is 4 to 5 cents lower at midday with wheat weakness and dollar
strength pulling corn to new lows for the move. Much of the Corn Belt looks to
remain damp in the near term, supporting moisture reserves but hindering field
work and early crop development. The weekly crop progress report is expected to
show planting progress moving fairly close to complete, emergence above normal,
and there may be the first conditions report this week. The weekly export
inspections were good at 1.006 million metric tons. Ethanol margins remain OK
but are under pressure from weaker energy prices. On the December chart
resistance is at the 10-day and 20-day moving averages both at $3.80 with
support at the $3.72 recent low, which we have tested this morning. July
futures dropped below is previous low for the move at $3.55 3/4. If we cannot
get back above this level do not be surprised to see long liquidation around
Soybean trade is flat to 3 cents higher in quiet trade at midday with light
commercial buying again supporting nearby trade. Meal is $2 to $3 higher and
oil is 30 to 40 points higher. Wet weather will continue to limit soybean
planting in some areas, with planting progress expected to be near the 5 year
average, with emergence slightly below average. The weekly export inspections
were OK at 291,192 metric tons. On the November soybean chart the 10-day at
$9.29 is resistance with support at $9, the contract low today of $9.06 is
nearby support. If we cut through $9 easily this week, expect some long
liquidation to most likely give us an active day to two, we expect some larger
sell stop orders below the physiological $9 level.
Wheat trade is 12 to 18 cents lower across the board at midday with the
sharply stronger dollar helping to trigger selling at midday. Excessively wet
weather in the U.S. and hints of dryness elsewhere will continue to support the
trade in the near term, but the dollar is very negative with the big jump over
the past week. The weekly crop progress report could show some deterioration
due to flooding, while spring wheat conditions should remain unchanged or a
little better. The weekly export inspections were a little better at 418,376
metric tons. On Kansas City July chart support is now the 50-day moving average
at $5.37 which we are below at midday, with resistance at the 100-day at $5.65
then the 200-day at $5.82.
David Fiala can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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