DTN Grain Midday: Tariff Talks Sink Trade

Maturing wheat. Photo: Blair Fannin, Texas AgriLife Extension

Tariff talk sinks trade, wheat the bright spot.

CORN

Corn trade is 2 to 4 cents lower at midday with trade fading on further China retaliation vs. U.S. Ag products being announced this morning, and overshadowing weather delays, with new lows scored this a.m.

Drier weather should be in play for this week with wetter weather for most expected to return after that. Ethanol margins will get a boost from cheaper corn, with the energy complex firmer this morning.

Basis will be choppy with river disruptions, and mixed demand, along with slow movement by farmers. Weekly crop progress is expected to show planting progress well behind normal, with emergence lagging with next week’s report the bigger focus. The weekly export inspections were decent at 1.001 million metric tons.

On the July nearby chart, support is the contract low at $3.43 with trade with the 10-day and 20-day moving average at $3.62, with the 50-day at $3.71.

SOYBEANS

Soybean trade is 12 to 14 cents lower with trade issues adding to the selling this morning with the July contract moving below $8.00 for the first time. Meal is 1.00 to 2.00 lower and oil is 35 to 45 points lower. Crush margins should still be positive in the near term, but remain well off the recent highs.

South American currencies remain cheap at the end of harvest, but their basis is starting to firm, which will help U.S. competitiveness if sustained into later in the month. Field work should generally remain slow in the near term but more progress is likely into next week.

Trade talks are expected to continue, but more U.S. gov’t payments to farmers looks to be the more likely outcome at this point. The weekly export inspections remain soft at 513,575 metric tons. The weekly crop progress report is expected to show planting behind normal.

The July chart support is the fresh low at $7.91, with resistance the 10-day moving average at $8.30.

WHEAT

Wheat trade is 3 cents lower to 4 cents higher with wheat trade finding some buying on short covering today, along with a drier forecast for parts of Russia. Europe and the Black Sea area will be watched more as their growing season keeps moving with mixed to good conditions so far and spring wheat seeding on going at a good clip.

The forecast does look to be trending drier short term, while much of the U.S. remains wet. The dollar has drifted back to the lower end of the range.

Weekly crop progress is expected to show steady conditions, with maturity still lagging, with spring wheat planting closing the delay gaps from last year. Weekly export inspections were the best since September of 2016 at 842,218 metric tons.

On the July Kansas City chart support the fresh lows at $3.82, with the lower Bollinger band at $3.81, and resistance the 10-day at $3.98.

General Comments

The U.S. stock market indices are sharply lower with the Dow 600 points lower. The interest rate products are weaker. The dollar index is 3 lower. Energies are firmer with crude up 0.07. Livestock trade is lower. Precious metals are mixed with gold up 11.30.

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