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DTN Grain Midday: Spillover Pressure from Soybeans

Ernst Undesser
By David Fiala DTN Contributing Analyst May 18, 2017

DTN Grain Midday: Spillover Pressure from Soybeans

Mid-season soybean field. ©Debra L Ferguson Stock Photography

Soybeans are sharply lower, corn lower, and wheat mixed at midday.

CORN

Corn trade is 4 to 5 cents lower at midday with spillover pressure from beans and noted Brazilian news pulling corn lower. Ethanol margins are benefiting from the lower corn, but still not where producers would like.

U.S. weather looks to remain wet for much of the belt which the market sees as mixed with some planting being effected but moisture good for the crop in the ground. The temps look to remain on the cool side potentially slowing development. Basis has remained steady to firm in the recent days.

The weekly export sales were better at 705,330 metric tons of old crop, and 168,300 of new. On the July chart, we are now back just below the $3.69 area where most of the major moving averages are clustered, with the $3.60 1/4 area as support yet again.

SOYBEAN

Soybean trade is 16 to 23 cents lower at midday with the Brazilian real dropping sharply with further corruption allegations versus the current Brazilian president. Meal is the $5.00 to $6.00 lower, and oil is 50 to 60 points lower.

The sharp drop in the real overnight will likely encourage broader selling of the large Brazilian crop, which is the main driver for our weakness with improved margins for their farmers. US basis should stay steady for the moment.

The weekly export sales were good seasonally at 355,300 of old crop, and 41,500 of new, with meal sales strong at 113,600 of old meal, 60,300 of new, and 15,500 combined of oil. July beans put in a low at $9.50 this morning, taking out the month low of $9.52.

WHEAT

Wheat trade is flat to 3 higher at midday with trade holding up the best with improving U.S. competitiveness and less spillover from Brazil. Egypt bought some U.S. wheat with the weaker dollar and protein making the US more competitive on the world market.

Weather looks to remain wet for much of the winter wheat belt, potentially enhancing disease concerns, while some of the damaged wheat tries to stand back up to mixed results. Early harvest in Texas has been disappointing so far. There has been some hail damage in the western belt from the recent storms with another big round on deck for today. The dollar is back to the lowest levels since the election with trade staying below 98 on the index today.

Weekly export sales were improved at 247,600 metric tons of old crop, and 393,100 of new. On the July Kansas City contract support is at the recent low of $4.20, with major support at the $4.11 contract low printed a month ago. The 20-day at 4.37 is chart resistance.

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Ernst Undesser
By David Fiala DTN Contributing Analyst May 18, 2017