DTN Midday Grain Comments 07/27 10:50
Soybeans Up Double Digits Midday Tuesday
Corn is 1 to 2 cents higher, soybeans are 11 to 12 cents higher and wheat is
flat to 10 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 205 points. The U.S.
Dollar Index is 0.28 lower. Interest rate products are firmer. Energies are
mixed with crude down $0.20. Livestock trade is mixed. Precious metals are
mixed with gold up $1.50.
Corn trade is 1 to 2 cents higher with support from soybeans, Brazil
importing corn from Argentina and conditions fading slightly. Ethanol margins
look stable to start the week with energies moving more sideways after last
week's volatility and the rebound in corn limiting gains. Brazil will continue
to move along with the end of the second crop season, with frost issues still
being watched as they reported book significant amounts of cargos from
Argentina, while near-term weather looks more mixed into August for the U.S.
Corn basis has remained flat with cash inverses likely to see more pressure as
wheat and southern sorghum start to become available to feed. Weekly crop
progress showed conditions down 1% to 64% good to excellent and 10% poor to
very poor; 79% silking versus 73% on average, and 18% in the dough versus 17%
on average. On the September contract, trade tested the 20-day at $5.60 before
fading with further support at the lower Bollinger band at $5.22.
Soybeans are 11 to 13 cents higher at midday with trade finding buying on a
further condition decline and continued mixed weather coming forward with trade
still needing meal to rally to build greater support. Meal is $6.00 to $7.00
higher and oil is 0.15 cent to 0.25 cent lower. The weather pattern is warmer
and drier short term with more rain coverage in the extended forecast for many.
South America will continue to ship soybeans while the run in canola values
turn more sideways potentially limiting oil upside short term. Basis levels
have been flat to weaker in recent days. Weekly crop progress showed 76%
blooming versus 71% on average, with 42% setting pods versus 36% on average at
58% good to excellent, down 2%, with 12% poor to very poor. On the September
soybean chart, resistance is at the 20-day at $13.64, which we are above at
midday, with the upper Bollinger Band at $14.33.
Wheat trade is flat to 10 cents higher with Minneapolis wheat leading the
charge after the choppy start to the week as winter wheat harvest winds down
and spring wheat starts up. Harvest will continue to expand across Europe and
the Black Sea with mixed results so far, while the dollar fades further after
the losses Monday, which could add support if sustained. KC holds at 33-cent
discount to Chicago widening Tuesday with Minneapolis at a 208-cent premium
moving sideways at these levels. Winter wheat harvest is 84% complete versus
81% on average while spring wheat conditions down another 3% to 8% good to
excellent and 66% poor to very poor with 3% harvested versus 2% on average. KC
September on the chart has support at the 20-day at $6.29 with resistance the
upper Bollinger Band at $6.82.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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