DTN Grain Midday: Soybeans Seeing Big Drop

Soybeans. ©Debra L Ferguson Stock Photography

Corn is 12 to 14 cents lower on the front month, 6 to 7 cents lower on new crop; soybeans are 28 to 31 cents lower on the front month and 17 to 19 cents lower on new crop, and wheat is flat to 15 cents lower.

CORN:

Corn trade is 12 to 14 cents lower on the front months and 6 to 7 cents lower on new crop at midday Friday as rains fire in the Western Corn Belt along with dollar strength. The WASDE report showed yields unchanged, with carryout down by 150 million bushels and with little change to world numbers as Brazilian double-crop corn eased lower, but not as aggressively as some sources.

Ethanol margins remain solid with the energy complex remaining elevated. Brazil weather looks mostly unchanged short term as the crop advances towards harvest with some late rains while U.S. weather will be watched for follow up rains in the West, with the East in better shape.

Corn basis should remain flat to weaker near term with more attention going to new crop. On the July contract, chart resistance is the upper Bollinger Band at $7.04 failed to hold above Thursday with the 20-day as support at $6.65.

SOYBEANS:

Soybeans are 28 to 31 cents lower on July and 19 to 21 cents lower on November following the broad commodity weakness with rains and dollar. Meal is $2.50 to $3.50 lower and oil is 2.80 cents to 3.30 cents lower on concerns about changes to Biofuel credits. The WASDE report kept yields steady with old crop carryout rising 15 million bushels to 135 million, and new crop rising the same to 155 million, and world stocks edging higher.

The weather pattern should allow for the end of first crop planting and spraying of earlier planted soybeans with rains on the edges of the belt short term. South America should continue to see shipping progress short term, with U.S. basis soft and processors widening bids in recent days before stabilizing towards the weekend.

On the July soybean chart, support is the lower Bollinger Band at $15.00, with resistance the 20-day at $15.49 that we faded through Thursday.

WHEAT:

Wheat trade is flat to 15 cents lower with rains for much of the spring wheat again, with row crop and harvest pressure limiting winter wheat after strength post report. The WASDE report showed wheat carryout down slightly to 852 million for old crop and 770 million for new. The dollar is attempting to consolidate at over 90 points on the index, working to limit upside as well.

Warmer weather this week should help to bring winter wheat along after the slowdown last week with early harvest getting underway on the far Southern Plains with the pace likely to catch up to average by next week. Other Northern Hemisphere weather will continue to be watched as well with little fresh news on the front.

KC continues at a 45-cent discount to Chicago narrowing a bit, with Minneapolis at a 82-cent premium, almost 70 cents off the early week spike highs. KC July on the chart has support the 20-day at $6.27 with resistance the recent high at $6.54.

MARKET SUMMARY:

The U.S. stock market is mixed with the Dow down 25 points. The U.S. Dollar Index is 0.50 higher. Interest rate products are weaker. Energies are mixed with crude up $0.70. Livestock trade is mixed with cattle leading. Precious metals are mixed with gold down $19.00.

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