DTN Grain Midday: Soybeans Lead Mixed Trade

©Debra L Ferguson Stock Photography

Corn futures are 11 to 12 cents lower, soybeans 8 to 10 cents higher and wheat 3 cents lower to 6 cents higher. Outside markets are generally positive.

CORN

Corn futures are 11 to 12 cents lower at midday. Following the limit-down move Monday after the bearish USDA report, we saw a gap lower open on the overnight and have challenged the $3.77 gap area left on May 15.

The WASDE report raised yields to 169.7 bushels per acre (bpa) vs. 164.7 bpa expected, with acres at 90.0 million vs. 87.07 million expected, putting production at 13.901 billion bushels (bb) vs. 13.123 bb expected, with old-crop carryout at 2.36 bb vs. 2.38 bb expected and new crop at 2.181 bb vs. 2.01 bb expected.

The Farm Service Agency (FSA) data dump indicated acreage to be closer to the initial trade guess. The forecast looks to be a non-issue in the near term. Ethanol margins remain poor with the firmer energy complex helping boost blender margins.

Basis is mixed post report. Weekly crop conditions were steady at 57% good to excellent, 13% poor to very poor, with 90% silking vs. 97% on average, 39% in the dough vs. 71% on average, 7% denting vs. 27% on average.

On the September nearby chart support is likely the $3.78 overnight low with $3.72 below that. Although trade has been slow around midday, expect an active afternoon trade and close.

SOYBEANS

Soybean futures are 7 to 11 cents higher, finding some support with trade improvement and a supportive report Monday. Meal is $4.00 to $5.00 higher with oil 20 to 30 points lower. On the report, yield was pegged at 48.5 bpa vs. 47.5 bpa expected with acres at 76.7 ma vs. 80.85 ma for production at 3.68 bb vs. 3.791 bb expected with old-crop carryout at 1.07 bb, same as expected with new crop at 755 mb vs. 836 mb expected.

The FSA data dump indicated acres closer to the initial trade guess as well. World export demand remains slow, with the U.S.’ disadvantage persisting on the currency markets and South American prices supported ahead of planting. The weather looks to be a short-term non-issue for soybeans.

The weekly condition report was unchanged at 53% good to excellent, 12% poor to very poor; 82% blooming vs 93% on average, with 54% setting pods vs. 76% on average.

The September chart support is the 10-day at 8.62, with the lower Bollinger Band at $8.45 below that, with the next level of resistance the 20-day at 8.77, which we are testing at midday.

WHEAT

Wheat futures are 3 cents lower to 6 cents higher, with Chicago trade catching a bid during the day session. The KC/Chicago spread is back to 90 cents, reversing its reversal. The corn/HRW spread is back to 15 cents. Chicago Sep-Dec is back towards 3 cents of carry.

On the report, carryout was 1.014 bb vs. 995 mb expected on all wheat production at 1.980 bb vs. 1.926 bb expected. Spring wheat harvest should expand with winter wheat just about wrapped up, with Europe continuing to move towards spring wheat harvest as well, with areas of delays with U.S. hard red wheat competitive on the world markets.

Weekly crop progress had winter wheat 89% cut vs. 96% on average, spring wheat 8% cut vs. 30% on average, and 69% good to excellent and 8% poor to very poor, down 4%. Weekly export inspections were improved again at 703,183 metric tons.

The September KC chart support is the new low at 3.84 1/2 with the first resistance the 4.00 area.

General Comments

U.S. stock market indices are sharply higher with the Dow 330 higher. The U.S. dollar index is 30 higher. Interest rate products are firmer. Energies are sharply higher. Cattle futures are sharply lower and hogs mixed. Precious metals are mixed with gold 4.00 lower.

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