DTN Midday Grain Comments 07/22 11:25
Soybean Complex Mixed at Midday
Grain trade is mostly lower at midday with old crop soybeans as the bright
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow up 70. The interest
rate products are mixed. The dollar index is 20 higher. Energies are mixed
with crude oil up $0.15. Livestock trade is mostly higher with cattle leading.
Precious metals are mixed with gold down $8.
Corn trade is 1 to 3 cents lower at midday with early buying evaporating.
The above normal heat is expected to subside today and tomorrow while moisture
forecasts are centered in the middle of the belt. Basis remains mostly sideways
and ethanol margins remain positive. The weekly crop condition report came in
identical as last week with 76% Good/Excellent, 19% Fair, 5% poor/very poor.
Progress listed 56% of the crop silking vs. 55% on average. Between an OK
weather outlook and the steady crop report the trend remains down. With new
lows put in today, December support will be $3.69, then $3.60. Resistance is at
$3.84, the 10-day moving average, with the gap yesterday nearby resistance. So
we have another gap down with a 1 1/2 cent drop from the $3.78 low on Friday to
the $3.76 1/2 high Sunday night.
Soybean trade is mixed with old crop 4 to 14 cents higher and new crop flat
to 4 cents lower with bull spreading a feature. A crop rating improvement has
limited buying. Meal is $4 to $5 higher and bean oil is narrowly mixed. The
weekly crop progress report showed a 1% improvement in the good/excellent at
73%, fair at 22% and poor/very poor at 5%. Blooming was pegged at 60% vs. 56%
on average, and pod set was at 19% vs. 17% on average. Weather forecasts remain
non-threatening for the most part. The USDA announced soymeal sales of 225,000
metric tons to an unknown destination, 180,000 metric tons to Vietnam, and bean
oil sales of 20,000 metric tons for the new crop year. On the November chart,
support is the contract low of $10.65, with resistance the 10-day moving
average at $10.86. There is limited support below the contract low; most expect
sizeable stops below support. If beans can continue to develop in the field,
selling pressure will likely continue to develop at the CBOT.
Wheat trade is 2 to 5 cents lower across the three exchanges as early
strength evaporated with the stronger dollar and lackluster row crop trade.
Further sanctions against Russia could promote additional short covering in the
heavily oversold market but so far trade seems fairly unconcerned with the
actions there. The weekly crop progress report has winter wheat 75% cut, and
spring wheat conditions steady with 70% good/excellent, 25% Fair, and 5%
poor/very poor, with heading at 84%. On the September Chicago chart, first
resistance is the 10-day moving average at $5.38 with support at $5.25 which
held yesterday. Kansas City September trade has support at $6.28 and resistance
at $6.40 on the 10-day moving average.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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