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DTN Midday Grain Comments     06/20 11:33

   Grains Trending Lower at Midday

   Early gains fade to broadly lower trade at midday.  

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are mixed with the Dow down 55 lower. The 
interest rate products are firmer. The dollar index is 20 points lower. 
Energies are mixed with crude up $1.00. Livestock trade is mostly lower. 
Precious metals are lower with gold down $2.70.


   Corn trade is 3 to 5 cents lower at midday with failing to hold early gains 
as soybeans sink again. Harvest should continue to expand in the double-crop 
areas of Brazil with open weather continuing, while Black Sea area corn remains 
mostly dry. U.S. weather looks to remain wet in the near term, with heat still 
showing in the extended forecast. The weekly ethanol report showed production 
up 11,000 barrels, with stocks down 527,000 barrels, with ethanol futures 
edging higher, and with blender margins remaining strong. Basis has been flat 
to firmer in recent days with the lower board. On the July chart we remain 
below the 10-day, at $3.66 which is now nearby resistance and then the 200-day 
at $3.82. Nearby support is the $3.38 3/4 fresh low from yesterday. 


   Soybean trade is 6 to 9 cents lower at midday with initial strength fading 
again during the day session as trade concerns remain in place. Meal is $4.50 
to $5.50 lower and oil is 45 to 55 points higher. Bean basis has remained 
steady to firmer, with trade likely to remain quiet in the near term as old 
crop exports remain slow with Brazilian values remaining strong on the 
anticipation of future business. Widespread rains should boost near term 
growth. Brazil continues to struggle with the logistical issues compounded by 
the trucker strikes with a large shipping line up. On the July chart, trade has 
support at the fresh low at 8.41, and resistance the 10-day at $9.30.


   Wheat trade is flat to 4 cents lower with harvest pausing for rains, while 
weather concerns build in Russia with the initial overnight strength failing to 
hold again. Wet weather for Kansas should slow harvest in the next week or so, 
with good overall progress so far, and heat returning next week to finish 
harvest. Spring wheat should see good progress with Canada remaining drier. 
Australia should see some improvement but overall remains mixed. Russian winter 
wheat is likely to remain on the dry side, with the spring wheat cool and wet 
with growing concerns there. HRW basis has remains solid ahead of the 
anticipated harvest protein improvement and board weakness. On the July Kansas 
City is back below all the major moving averages with the 200-day at $4.96 the 
closest to the market, and $4.71 becoming support as the fresh low.

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered adviser. 
He can be reached at dfiala@futuresone.com 
Follow him on Twitter @davidfiala


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