DTN Grain Midday: Soybean Futures Suffering Meltdown

Midseason soybean field. Photo: University of Minnesota

Corn is 10 to 11 cents lower, soybeans are 42 to 44 cents lower and wheat is 6 to 18 cents lower.

CORN:

Corn trade is 10 to 11 cents lower at midday Tuesday with spillover pressure from soybeans and little fresh bullish news to push trade as September/December remains at a small carry and weather looks little changed short term. Ethanol margins will continue to see pressure with energies sliding, along with the coming shift to cheaper fall blends, while corn remains rangebound.

Brazil will continue to move along with the end of the second crop season and estimates still trending lower. Corn basis continues to fade with cash inverses likely to see more pressure as early harvest gets going to the south. The weekly crop report showed good to excellent at 62%, down 2%, and 11% poor to very poor, with 91% silking versus 86% on average, and 38% in the dough versus 33% on average on the weekly crop report.

On the September contract, resistance remains at $5.53 20-day moving average, which we are below at midday with further support at the lower Bollinger Band at $5.30.

SOYBEANS:

Soybeans are 42 to 45 cents lower at midday with broad product weakness, improved conditions and slower movement out of South America bringing selling Tuesday morning. Meal is $9.00 to $10.00 lower and oil is 1.75 cents to 1.95 cents lower. The weather pattern looks dry short term. South America has a declining ship line, while the run in canola values turned more sideways to lower, keeping a lid on oil values as well.

Basis levels have been flat to weaker in recent days. Weekly crop progress showed good to excellent up 2% to 60% good to excellent and 12% poor to very poor, with 58% setting pods versus 52% on average, and 86% blooming versus 82% on average. On the September soybean chart, resistance is at the 20-day at $13.67, which we fell below last week, with the lower Bollinger Band at $13.20, which we are below at midday.

WHEAT:

Wheat trade is 6 to 18 cents lower with KC trade leading as Russian crop estimates fall and spreads unwind overnight. Spring wheat harvest is expanding and buying enthusiasm slowing, with the early push to new highs Tuesday morning quickly fading. Harvest will continue to roll across Europe and the Black Sea with mixed results so far and Canada on deck, while the dollar is just above 92 points on the index at midday.

KC holds at 22-cent discount to Chicago, narrowing a bit, with Minneapolis at a 186-cent premium fading back to the lower end of the range. Weekly crop progress showed winter wheat 91% complete versus 84% on average, with spring wheat 9% good to excellent, up 1% and 64% poor to very poor, and 17% harvested versus 4% on average.

KC September on the chart has support at the 20-day at $6.44 with resistance the upper Bollinger Band at $7.09.

MARKET SUMMARY:

The U.S. stock market is mixed with the Dow up 115 points. The U.S. Dollar Index is 0.08 higher. Interest rate products are mixed. Energies are mostly lower with crude off $0.90. Livestock trade is firmer. Precious metals are weaker with gold down $8.30.

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