DTN Midday Grain Comments 06/02 11:56
Corn, Wheat Lower at Midday
Corn is flat to 1 cents lower, soybeans are 8 to 9 cents higher, and wheat
is 2 to 8 cents lower.
David Fiala,DTN Contributing Analyst
The U.S. stock market is flat with the Dow 30 points higher. The dollar
index is 40 points lower. Interest rate products are weaker. Energies are
weaker with crude down $1.00. Livestock trade is mixed with cattle leading.
Precious metals are firmer with gold up $2.00.
Corn trade is flat to 1 cent lower with light, two-sided trade so far after
few surprises on the crop progress report Monday afternoon. Ethanol margins
remain stable with unleaded demand holding the recent plateau with slower run
rates at refineries expected to help keep supplies manageable. Warmer, drier
weather for most is expected for the bulk of the week before cooling next week.
Basis has been mostly steady to start the week. Weekly crop progress showed
planting at 93% vs. 89% on average, 78% emerged vs. 73% on average, and 74%
good to excellent, up 4% and poor to very poor at 4%. On the July contract
support is the 20-day at $3.19, and resistance the fresh high at $3.31.
Soybean trade is 8 to 9 cents higher at midday with trade getting
confirmation of sales to China with 132,000 metric tons announced for new crop.
Meal is flat to $1.00 higher, and oil is 20 to 30 points higher. The real has
gained against the dollar overnight as well getting to the best levels in
weeks. South America continues to move along harvest wise with strong shipments
out of Brazil likely to continue for the near term. Crush margins remain solid
for the time being. Weekly crop progress showing 75% planted vs. 68% on
average, 52% emerged vs. 44% on average, and initial conditions were 70% good
to excellent and 4% poor to very poor. The July soybean chart support is the
lower Bollinger Band at $8.29, and resistance the 20-day at $8.43 which we are
just above at midday, with the upper Bollinger Band at $8.56 the next round up.
Wheat trade is 1 to 8 cents lower with trade selling off with better
near-term Euro and Russia forecasts along with mixed wheat conditions and the
beginnings of harvest. The Plains look to trend warmer and drier to push the
crop along this week. Kansas City is at a 58-cent discount to Chicago on the
July with wider action so far, while Minneapolis is back to a 8 cent premium.
The dollar is scoring new lows again Tuesday morning, and further weakness
likely adds support with Black Sea origin still winning nearby tenders. Weekly
crop progress showed winter wheat 77% headed vs. 81% on average, with harvest
3% complete vs. 2% on average, with good to excellent down 2% to 51% good to
excellent, and 19% poor to very poor. Spring wheat was 91% planted vs. 96% on
average, and 67% emerged vs. 80% on average, with 80% good to excellent, and 2%
poor to very poor. The July Kansas City chart support is the lower Bollinger
Band at $4.32 which we tested last week before bouncing with resistance the
20-day at 4.60 which have faded back from during the day session.
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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