DTN Midday Grain Comments 05/22 11:27
All Grains Higher at Midday
Wheat leads trade higher across the board at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow down 10 points. The
interest rate products are firmer. The dollar index is 10 points lower.
Energies are firmer with crude up 0.40. Livestock trade is mostly lower.
Precious metals are firmer with gold up 1.00.
Corn trade is 2 to 4 cents higher at midday with trade finding fresh buying
as we move back towards the contract highs with support from weather and trade
optimism. Warm weather should dominate the week, with near-term rains looking
to miss wider swaths of the belt. The second crop areas of Brazil are trending
back drier in the near term. Ethanol margins remain stable with the energy
complex near the upper end of the range, with Memorial Day demand just around
the corner, and futures edging back to $1.52 gallon. The weekly crop progress
report showed planting at 81% complete, same as average, and 50% emerged, 3
percentage points ahead of average. On the July chart we moved back above the
20-day at $3.99 1/2 with the next level of support is 50-day at 3.94 which we
tested to start the week, with resistance at the recent high at $4.08.
Soybean trade is 2 to 4 cents higher at midday, with trade working to
consolidate the gains from yesterday while South American supplies limit upside
for now. Meal is 1.50 to 2.50 lower and oil is 20 to 30 points higher. South
America's recent pattern should remain intact near term, with the Real and Peso
remaining near record lows to boost export competiveness, with harvest moving
towards the home stretch in Argentina with quality concerns remaining. Crush
margins have narrowed but remain positive, with meal struggling to rally again
here today. Weekly crop progress reflected the fast early pace with soybeans
56% planted, vs. 44% on average, and 26% emerged vs. 15% on average. On the
July chart, trade is back just above the 200-day at $10.16 with the next level
of support the recent low at $9.93, and the 20-day at 10.26 the next level of
resistance, which we are just above at midday with the 50-day at $10.38 the
next round up.
Wheat trade is 15 to 22 cents higher at midday reversing the losses from
Monday with the weaker dollar and drier forecast for the Plains. Warmer weather
should help to boost maturity with the crop still behind normal, but catching
up with another week of heat likely to add stress to the heading crop. Spring
wheat should see better progress with warmer weather helping to catch up
emergence. The Black Sea area will continue to dominate export trade with
weather issues limited for the moment but some dryness so far with concerns
starting to build. Black Sea values are at $202 a ton. Weekly crop progress had
conditions unchanged on good to excellent at 36% with poor to very poor 1
percentage point lower at 35%, with 61% headed vs. 74% on average. Spring wheat
was 79% planted, 1 percentage point behind average, with emerged at 37%, 15%
behind average. On the July Kansas City contract support is the 20-day at 5.33,
with the upper Bollinger Band at 5.65.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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