DTN Grain Midday: Futures Diving Deep Into the Red

Corn is 33 to 35 cents lower with new crop 23 to 25 cents lower, soybeans are 43 to 47 cents lower with new crop 37 to 39 cents lower and wheat 17 to 24 cents lower.

CORN:

Corn trade is 33 to 35 cents lower on old-crop corn, with new crop 24 to 26 cents lower. There is broader selling amid commodity weakness with trade holding about a nickel off limit lower. The WASDE report had old-crop carryout at 1.257 billion, in line with expectations, and new crop at 1.507 billion versus 1.36 billion expected with trendline yield at 179.5 bushels per acre.

World stocks were 292.3 million metric tons on new crop versus 286 mmt expected. South American estimates are not seeing the expected amount despite Brazilian double-crop weather. Ethanol margins remain fairly stable and should get a boost from the corn pullback.

Cooler weather short term after rains should give way to warmer and wetter action by the end of the week with the lower two-thirds of the Corn Belt inline for rains. Brazil continues to struggle with dryness during pollination with crop estimates still falling.

Corn basis is holding firm throughout the belt but sustained barge delays could add pressure quickly. Weekly export sales saw old crop at -113,400 metric tons and 2.08 million metric tons of new crop. On the July contract, chart resistance is the fresh contract high at $7.35 3/4 with support the 20-day at $6.63.

SOYBEANS:

Soybeans are 43 to 47 cents lower on the front months, and 37 to 39 cents lower on new crop with trade fading further from the fresh highs Wednesday and spread action turning weaker. Meal is $17.50 to $18.50 lower and oil is 0.20 cent to 0.30 cent lower. The WASDE report showed old crop carryout at 120 million bushels, in line with expectations, with new crop at 140 million also in line with expectations.

South American production was unchanged and new-crop world stocks at 91.1 million metric tons. Planters will continue to roll short term with some areas of rain slowing action and warmer temps to boost emergence. South America should continue to see shipping progress short term, while domestic crush will carry U.S. basis.

Weekly export sales were soft at 94,300 metric tons of old crop, 102,500 of new crop, old meal at 74,600 mt, new at 102,500 mt and oil at 800 mt. On the July soybean chart support is the 20-day at $15.33, with resistance the fresh high at $16.67 1/2.

WHEAT:

Wheat trade is 17 to 24 cents lower at midday with spring wheat leading on weather and weaker corn action bogging down the winter wheats along with the dollar rally holding to encourage selling, along with the WASDE report coming in slightly higher than expected at 872 million bushels of old crop and 774 of new versus 844 mb and 743 mb expected, respectively, and yield on winter wheat rising to 52.1 bushels per acre versus 50.9 bpa. KC is at 42-cent discount to Chicago with Minneapolis now 39 cents above Chicago with intramonth spreads mixed.

Seasonal weather on the Plains should boost growth with dry concerns for spring wheat staying in place with some pockets of relief in recent days. Other Northern Hemisphere weather will continue to be watched as well with little fresh news on the front.

Weekly export sales were soft at 30,300 metric tons of old crop and 268,000 metric tons of new crop. KC July on the chart has eased below the 20-day at $6.86 overnight with the lower Bollinger Band below that at $6.18.

MARKET SUMMARY:

The U.S. stock market is firmer with the Dow up 380 points. The U.S. Dollar Index is 0.08 higher. Interest rate products are firmer. Energies are weaker with crude down 2.00. Livestock trade is mixed. Precious metals are flat to weaker with gold narrowly mixed.

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