DTN Midday Grain Comments 05/10 10:43
Wheat Futures Deep in the Red Midday Monday
Corn is 9 to 11 cents lower with new crop 18 to 20 cents lower, soybeans are
1 to 3 cents lower with new crop 16 to 18 cents higher and wheat 25 to 35 cents
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow up 310 points. The U.S. Dollar
Index is 0.08 lower. Interest rate products are mostly higher. Energies are
narrowly mixed with crude down $0.30. Livestock trade is mixed with cattle
leading. Precious metals are mixed with gold up $8.40.
Corn trade is 9 to 11 cents lower upfront at midday Monday with new crop 16
to 18 cents lower. There is strong spread action and back-month selling after
widespread rains in much of the Corn Belt, along with new-crop sales of 1.02
million and cancellations of 280,000 metric tons of old crop, both by China.
Ethanol margins will be supported by stronger unleaded values after the
pipeline shutdown, with a boost from corn values if they stay soft. Cooler
weather short term after rains should give way to warmer and wetter action by
the end of the week. Brazil continues to struggle with dryness during
pollination. Corn basis continues to be firm throughout the belt. Weekly export
inspections were a little softer at 1.707 million metric tons. Planting
progress are likely to remain well ahead of the five-year average, with
emergence near average with the colder weather. On the July contract, chart
resistance is the fresh contact high at $7.35 3/4 with support the 20-day at
Soybeans are 1 to 2 cents lower upfront, with new crop 17 to 19 cents lower.
Soybeans are seeing spillover from the weaker corn and wheat action Monday
morning, but spreads remain solid and other fresh news is lacking overall. Meal
is flat to $1.00 lower and oil is 0.45 cent to 0.55 cent lower. Planters will
continue to roll short term with some areas of rain slowing action, but we will
remain well ahead of normal on the weekly report, with export inspections
showing seasonal action at 236,918 metric tons. South America should continue
to see shipping progress short term, while domestic crush will carry U.S.
basis. On the July soybean chart, support is the 20-day at $14.99, with
resistance the upper Bollinger Band at $16.18.
Wheat trade is 25 to 35 cents lower at midday with broad weakness spilling
over from corn, along with improved short-term weather and U.S. wheat being
uncompetitive on the world market. KC is at 23-cent discount to Chicago with
Minneapolis now 28 cents above Chicago with intramonth spreads mixed. Seasonal
weather on the Plains should boost growth with dry concerns for spring wheat
staying in place with some pockets of relief. Weekly export inspections were
range bound at 545,587 metric tons. Weekly crop progress should show steady
conditions and heading remaining just behind average, with spring wheat
planting still well ahead of average with emergence nearing 50%. Other Northern
Hemisphere weather will continue to be watched as well with little fresh news
on the front. KC July on the chart has support at the recent low of $6.86 3/4
and resistance the upper Bollinger Band at $7.63.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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