DTN Grain Close: Markets Respond to Weather Concerns

New-crop corn, soybeans and all three wheats finished higher Thursday, given a boost by hot and dry conditions in the southern Plains and expectations for increased drought in the southern Plains and Pacific Northwest. Outside commodities were mixed.

 

Midday: Wheat and corn lead at midday, with soybeans softer.

CORN

Corn trade is 3 to 4 cents higher at midday with trade firming back from the softer trade overnight. On the chart it appears the market is trying to move through nearby resistance, with a close near these levels likely giving trade a little better momentum.

Cooler weather looks to hang around the next couple weeks with mixed moisture potential with a growing focus on early August weather with the advanced state of the crop. Ethanol board margins remain positive but have narrowed with firmer corn and weaker energy trade, but ethanol futures are edging back higher this morning.

Corn basis has been flat to firmer for the most part. Weekly export sales were good at 641,000 metric tons of old crop corn, and 774,500 of new crop.

On the September chart, futures are above the 10-day at $3.47, with the 20-day at $3.52 chart resistance from here if we get a positive close. Support is the fresh low of $3.37 1/4 scored last week which is also the level of the lower Bollinger Band.

SOYBEANS

Soybean trade is 1 to 3 cents lower at midday with the firmer dollar and ongoing trade issues still providing fairly stiff headwinds so far today. Meal is $1.50 to 2.50 lower, and oil is 20 to 30 points lower.

Brazil remains at a stout premium to US origin, which is compounded by the ongoing logistics issues with Brazil with premiums around $2.05, which almost equals the tariffs placed by China. Bean basis has remained steady with processors taking the lead with crush margins remaining exceptionally strong.

Weekly export sales were decent at 252,300 metric tons of old crop, 613,400 metric tons of new crop, 131,000 metric tons of old crop meal, 91,000 of new crop meal, 10,900 of old crop oil, and 9,200 of old crop oil. Weather should not be a major driver near term for soybeans due to limited stressful forecasts but with pod fill starting, beans could be more active based upon any forecast changes.

On the August chart, the 10-day at $8.42 is again the first level of resistance which we have not been able to follow through with further support the lower Bollinger Band at 8.13 with the next level resistance the 20-day at 8.55.

WHEAT

Wheat trade is 5 to 8 cents higher at midday with trade trying to push through the $5.00 area on front month winter wheat, with Chicago just above that level, and Kansas City just below. Harvest pressure should start to fade as it winds down for the winter wheat. Spring wheat progress will slow a bit in North America with the cooler weather.

Russian harvest continues to move along as well with yields remaining below last year’s levels as they get into spring wheat harvest, although they have improved a little more as harvest expands. Western Europe continues to see excessive heat as harvest moves forward there. HRW basis has remains solid through harvest with the better protein with offered premiums declining.

The weekly export sales were soft at 300,000 metric tons. On the September chart, Kansas City is just above the 20-day at $4.89 and the 10-day at $4.91 at midday with the 200-day at 5.11 the next level of resistance.

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