DTN Grain Midday: Futures in the Red Again

Irrigation pivot in corn. ©Debra L Ferguson Stock Photography

Corn is 6 to 8 cents lower on the front month, 16 to 18 cents lower on new crop; soybeans are 4 to 6 cents lower on the front month and 17 to 19 cents lower on new crop, and wheat is 6 to 19 cents lower.

CORN:

Corn trade is 6 to 8 cents lower on the front months and new crop is 16 to 18 cents lower with broad ag commodity weakness. The forecast is still improving as the market shakes off short-term stress and a decline in conditions, while spread trade works on its second day of strength.

Ethanol margins remain solid with the energy complex remaining elevated as corn pulls back and driving demand remaining good while concerns about biofuel policies remains in place. Brazil weather looks mostly unchanged short term as the crop advances toward harvest with some late rains while U.S. weather will be watched for consistency while heat will be the rule of many the next few days.

Weekly crop conditions were 4% lower to 68% good to excellent and 5% poor to very poor, with 96% emerged versus 74% on average.

Corn basis should remain flat to weaker near term with more attention going to new crop. On the July contract, trade has pulled below the 20-day at $6.65 with the overnight test failing, with the lower Bollinger Band at $6.27 as support.

SOYBEANS:

Soybeans are 4 to 6 cents lower at midday with new crop 17 to 19 cents lower with firmer spread trade and spillover from weaker grain markets on the back months. Meal is narrowly mixed and oil is 0.60 cent to 0.80 cent lower with the soy oil liquidation slowing.

The weather pattern should allow for short-term stress to give way to rains, with conditions down 5% at 62% good to excellent and 8% poor to very poor, with 94% planted versus 88% on average, and 86% emerged versus 74% on average. South America should continue to see shipping progress short term, with U.S. basis soft with processors and exporters softening bids recently.

On the July soybean chart, support is the fresh low at $14.55, with the lower Bollinger Band resistance at $14.72, which we have tested Tuesday morning.

WHEAT:

Wheat trade was 6 to 19 cents lower at midday with winter wheats the downside leader on spillover from corn and harvest pressure while spring wheat works to stabilize. The dollar is attempting to consolidate at over 90 points on the index, which, if sustained, will work to limit upside.

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Warmer weather this week should help to bring winter wheat along after the slowdown last week as early harvest is getting underway on the far Southern Plains with heading at 92% headed, same as average, and harvest at 4% versus 15% on average, and good to excellent down 2% to 48% and 20% poor to very poor.

Spring wheat 8% headed versus 6% on average, and good to excellent down 1% to 37% good to excellent, with 27% poor to very poor. Other Northern Hemisphere weather will continue to be watched as well with little fresh news on the front with Russia mostly OK for now.

KC continues at a 48-cent discount to Chicago widening a bit, with Minneapolis at an 83-cent premium. KC July on the chart has resistance the 20-day at $6.28 with support at the lower Bollinger Band at $6.01.

MARKET SUMMARY:

The U.S. stock market is mixed with the Dow down 170 points. The U.S. Dollar Index is narrowly mixed. Interest rate products are weaker. Energies are mixed with crude up $0.95. Livestock trade is mixed with cattle leading. Precious metals are weaker with gold down $3.60.

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