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DTN Midday Grain Comments 08/12 10:58
Corn, Soybean Futures Higher at Midday; Wheat Lower
Corn futures are 2 to 3 cents higher at midday Friday; soybean futures are 8
to 12 cents higher; wheat futures are 11 to 17 cents lower.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
Corn futures are 2 to 3 cents higher at midday Friday; soybean futures are 8
to 12 cents higher; wheat futures are 11 to 17 cents lower. The U.S. stock
market is sharply higher with the DOW up 180 points. The U.S. Dollar Index is
65 points higher. Interest rate products are firmer. Energies are mixed with
crude down 2.25. Livestock trade is mostly lower. Precious metals are firmer
with gold $3.00 higher.
CORN:
Corn futures are 2 to 4 cents higher with trade firming as spreads relax a
little as we await the August WASDE numbers, along with seeking more
consistency in the forecast. Short-term forecasts show drier weather for most
with warmer-than-normal temperatures for the Center and Western Corn Belt with
moderation expected the second week, along with some better showers in the west
early next week. Ethanol margins will continue to be limited by driving demand
and seasonal slowdowns with unleaded futures bouncing off six months lows to
crimp blending margins if sustained into fall. Basis will be watched to see how
much further strength fades, especially with the board rally and harvest
starting in the South. On the WASDE report, yield is expected to come in at
175.9 bushels per acre (bpa) with trade looking for demand cuts to balance the
yield decrease, keeping carryout at 1.510 billion bushels (bb) for new crop.
September chart support is the 20-day moving average at $6.02 and the upper
Bollinger Band is the next round up at $6.36, which we are holding just below.
SOYBEANS:
Soybean futures are 8 to 12 cents higher with consolidation of recent gains
ahead of the report. The forecast remains fairly mixed short term as heat
should abate out of the weekend with better rains in the west early next week.
Meal is $7.50 to $8.50 higher and oil 15 to 25 points higher. On the WASDE
report, trade is looking for an average yield guess of 51.1 bpa, down just
slightly from July, with carryout at 226 million bushels (mb), remaining tight.
Biodiesel margins remain positive but narrowing in recent days. South America
is on post-harvest footing for shipping with their advantage to persist until
September, while the bulk of the U.S. is heading into the start of pod-fill
season with concerns about short-term stress still in place. Basis has
rebounded with the old-crop strength the last couple days as well. On the
September soybean chart, support is the 20-day moving average at $14.29, which
we are well above, with the Upper Bollinger Band at $15.52, which we have faded
from.
WHEAT:
Wheat futures are 11 to 17 cents lower with long profit-taking ahead of the
report in low volume trade so far as trade works to consolidate above nearby
support with action firming a bit towards the report. Plains weather looks
warmer and drier this week with moisture needing to be built before planting
time with the second week looking better, while spring wheat sees heat with
harvest, getting hitting full stride short term. The dollar is rebounding a bit
this morning as the pace of inflation showed easing Friday morning along with
Black Sea potential still being watched as ships continue to trickle out of
Ukraine. The KC September chart had resistance at the 20-day moving average at
$8.61, which we bounced off of this morning with trade looking to see if action
can consolidate, with the Upper Bollinger band at $8.97, the next round up,
which we tested Thursday.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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