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DTN Midday Grain Comments 06/05 10:55
Corn, Soybean Futures Lower at Midday; Wheat Mixed
Corn futures are 10 to 12 cents lower at midday Monday; soybean futures are
4 to 6 cents lower; wheat futures are 2 cents lower to 5 cents higher.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
Corn futures are 10 to 12 cents lower at midday Monday; soybean futures are
4 to 6 cents lower; wheat futures are 2 cents lower to 5 cents higher. The U.S.
stock market is mixed with the S&P up 10 points. The U.S. Dollar Index is flat.
Interest rate products are mixed. Energies are firmer with crude .80 higher and
natural gas up .10. Livestock trade is mixed. Precious metals are mixed with
gold up 5.00.
CORN:
Corn futures are 10 to 12 cents lower up front with spreads softer as new
crop fades from the highs, off 3 to 4 cents. Trade is watching forecasts and
outside markets as early spillover strength eases at midday. Ethanol margins
should be steady with corn holding the range, and unleaded extending recent
gains, although they have backed off the overnight highs. The daily wire will
likely remain quiet in the short term. Weekly export inspections remained solid
at 1.181 million metric tons (mmt). Basis continues to hold a softer tone with
better movement possibilities as fieldwork wraps up with most rains expected to
stay in the Western Corn Belt in the short term. The second crop in Brazil
continues toward the home stretch with some recent rains, but drier seasonal
tone in place overall. Weekly crop progress should show planting effectively
complete, emergence ahead of the 5-year average, and conditions steady to
slightly lower Monday afternoon. On the July chart we have support at the
20-day moving average at $5.86 with momentum fading at the $6.10 area again
Monday morning.
SOYBEANS:
Soybean futures are 4 to 6 cents lower with trade fading back from the
overnight test of support. Oil is leading products lower and expected weather
improvement in the U.S. is weighing on the market. Meal is narrowly mixed and
oil is 60 to 80 points lower. Weekly inspections are in line seasonally at
214,247 metric tons (mt). Basis will likely remain a little softer with more
buyers rolling to the back months. Planting should be on the homestretch
nationally with the east remaining drier. The weekly crop progress number are
likely to show planting and emergence solidly above the 5-year average, with
first conditions on the low end of the last five years, just as corn started
last week. July chart support is the lower Bollinger Band at $12.67 which we
bounced off last week with the 20-day moving average at $13.56 tested overnight
before we pulled back.
WHEAT:
Wheat futures are 2 cents lower to 5 cents higher at midday with Minneapolis
action leading. We are drawing closer to the ramp up of harvest for the Plains.
Spring wheat is seeing warmer short-term temps along with drier short-term
Black Sea action. There is more grain corridor talk and Ukraine is reportedly
taking the initiative in the war. Plains rains are expected to continue but the
potential for improvement for this year's crop is limited. SRW and spring wheat
areas should move along development-wise with slightly better conditions
expected on the weekly progress report. Heading remains in line with average
and spring wheat is likely to be caught up to the 5-year average on planting
and emergence. The dollar is just off the recent highs, with Matif wheat just a
touch higher to start the week. Weekly export inspections softened a little at
291,559 mt. On the KC July chart, the lower Bollinger band at $7.62 is support
with $8.00 becoming the first level of support, which we closed solidly above
Friday with the 20-day moving average above the market at $8.38.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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