DTN Midday Grain Comments 06/11 10:49
Soybeans Seeing Big Drop Midday Friday
Corn is 12 to 14 cents lower on the front month, 6 to 7 cents lower on new
crop; soybeans are 28 to 31 cents lower on the front month and 17 to 19 cents
lower on new crop, and wheat is flat to 15 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow down 25 points. The U.S. Dollar
Index is 0.50 higher. Interest rate products are weaker. Energies are mixed
with crude up $0.70. Livestock trade is mixed with cattle leading. Precious
metals are mixed with gold down $19.00.
Corn trade is 12 to 14 cents lower on the front months and 6 to 7 cents
lower on new crop at midday Friday as rains fire in the Western Corn Belt along
with dollar strength. The WASDE report showed yields unchanged, with carryout
down by 150 million bushels and with little change to world numbers as
Brazilian double-crop corn eased lower, but not as aggressively as some
sources. Ethanol margins remain solid with the energy complex remaining
elevated. Brazil weather looks mostly unchanged short term as the crop advances
towards harvest with some late rains while U.S. weather will be watched for
follow up rains in the West, with the East in better shape. Corn basis should
remain flat to weaker near term with more attention going to new crop. On the
July contract, chart resistance is the upper Bollinger Band at $7.04 failed to
hold above Thursday with the 20-day as support at $6.65.
Soybeans are 28 to 31 cents lower on July and 19 to 21 cents lower on
November following the broad commodity weakness with rains and dollar. Meal is
$2.50 to $3.50 lower and oil is 2.80 cents to 3.30 cents lower on concerns
about changes to Biofuel credits. The WASDE report kept yields steady with old
crop carryout rising 15 million bushels to 135 million, and new crop rising the
same to 155 million, and world stocks edging higher. The weather pattern should
allow for the end of first crop planting and spraying of earlier planted
soybeans with rains on the edges of the belt short term. South America should
continue to see shipping progress short term, with U.S. basis soft and
processors widening bids in recent days before stabilizing towards the weekend.
On the July soybean chart, support is the lower Bollinger Band at $15.00, with
resistance the 20-day at $15.49 that we faded through Thursday.
Wheat trade is flat to 15 cents lower with rains for much of the spring
wheat again, with row crop and harvest pressure limiting winter wheat after
strength post report. The WASDE report showed wheat carryout down slightly to
852 million for old crop and 770 million for new. The dollar is attempting to
consolidate at over 90 points on the index, working to limit upside as well.
Warmer weather this week should help to bring winter wheat along after the
slowdown last week with early harvest getting underway on the far Southern
Plains with the pace likely to catch up to average by next week. Other Northern
Hemisphere weather will continue to be watched as well with little fresh news
on the front. KC continues at a 45-cent discount to Chicago narrowing a bit,
with Minneapolis at a 82-cent premium, almost 70 cents off the early week spike
highs. KC July on the chart has support the 20-day at $6.27 with resistance the
recent high at $6.54.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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