DTN Midday Grain Comments 05/12 10:43
Soybeans Up Huge Prior to WASDE
Corn is 1 to 2 cents higher with new crop 5 to 6 cents lower, soybeans are
43 to 47 cents higher with new crop 16 to 18 cents higher and wheat flat to 7
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 300 points. The U.S.
Dollar Index is 0.54 higher. Interest rate products are weaker. Energies are
firmer with crude up $1.15. Livestock trade is firmer. Precious metals are
weaker with gold down $12.90.
Corn trade is 1 to 2 cents higher on the front months, with new crop 5 to 6
cents lower and early gains fading as trade works to carve out a range in
pre-report action with domestic weather unthreatening for the moment. The
weekly ethanol report showed production rebound by 27,000 barrels per day, with
stocks down by 1.047 million barrels. 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 with China buying 680,000 metric
tons of new crop in the daily wire. The WASDE report is expected to show
old-crop carryout at 1.269 billion, and new crop and 1.360 billion with
reductions to world stocks on the Brazil double crop. On the July contract,
chart resistance is the fresh contract high at $7.35 3/4 with support the
20-day at $6.58.
Soybeans are 43 to 46 cents higher upfront, with new crop 16 to 18 cents
higher and stronger spread action along with the surge in product values
carrying trade. Meal is $7.50 to $8.50 higher and oil is 2.05 cents to 2.15
cents higher. The WASDE report is expected to show carryout at 116 million
bushels on old crop and 138 on new, with world stocks flat from last month.
Planters will continue to roll short term with some areas of rain slowing
action, with warmer temps to boost emergence. South America should continue to
see shipping progress short term, while domestic crush will carry U.S. basis.
On the July soybean chart, support is the 20-day at $15.22, with resistance on
the long-term chart high at $16.63.
Wheat trade is 7 cents lower to 2 cents higher at midday with spring wheat
leading on weather and flat corn action bogging down the winter wheats, along
with the sharply stronger dollar. KC is at 36-cent discount to Chicago with
Minneapolis now 33 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. The WASDE report is expected to show old-crop carryout at 844
million bushels, and 743 million on new, with world stocks flat. KC July on the
chart has support at the recent low of $6.86 3/4, and resistance the upper
Bollinger Band at $7.59.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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