DTN Midday Grain Comments 06/18 10:44
Grain Futures Look to Head Into the Weekend Higher
Corn is 13 to 14 cents higher up front and 23 to 25 cents higher on new
crop; soybeans are 46 to 48 higher up front and 48 to 52 higher on new crop,
and wheat is 14 to 20 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 470 points. The U.S.
Dollar Index is 0.50 higher. Interest rate products are mostly higher. Energies
are firmer with crude up $0.90. Livestock trade is mixed with feeder cattle the
weak link. Precious metals are mixed with gold flat.
Corn trade is 13 to 14 cents higher up front, with the back months 23 to 25
cents higher and weaker spread trade as buying returns after Thursday's washout
on short covering into the weekend and spillover from calmer trade elsewhere.
Ethanol margins are seeing support from corn values sliding on the week, but
concerns about blending rates will limit upside along with the energy complex
flattening out. Brazil weather looks mostly unchanged short term as the crop
advances towards harvest with some late rains. Meanwhile U.S. weather will be
watched for consistency in the second week forecast with cooler weather
expected for the most by Monday. Corn basis should remain flat to weaker near
term with more attention going to new crop. On the July contract, trade is back
below the 20-day at $6.65 with the late strength Thursday holding, with the
lower Bollinger Band at $6.23.
Soybeans are 46 to 48 cents higher up front, with new crop 48 to 52 cents
higher and trade retracing about 50% of Thursday's action so far with slightly
weaker spread trade and short covering in products. Meal is $4.50 to $5.50
higher and oil is 1.85 cents to 2.05 cents higher. The weather pattern should
allow for short-term stress to give way to rains in the center of the belt with
double-crop acres to go in as soon as wheat harvest moves along. South America
should continue to see shipping progress short term, with U.S. basis soft with
processors and exporters firming bids in spots after Thursday. On the July
soybean chart, support is $13.23 1/2 lower from Thursday, with $14.00 the first
level of resistance on the rebound.
Wheat trade is 14 to 20 cents higher at midday with trade bouncing back
along with the row crop with headwinds from the dollar and harvest likely to
stay in place short term. The dollar is attempting to consolidate at over 91
points on the index post Fed, which will work to limit upside if sustained with
more consistent action into the second half of the month. 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. Other Northern
Hemisphere weather will continue to be watched as well with little fresh news
on the front with Russia mostly OK for now. KC continues at a 54-cent discount
to Chicago widening a bit, with Minneapolis at a 107-cent premium. KC July on
the chart has resistance the 20-day at $6.25 with support at the lower
Bollinger Band at $5.91.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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