DTN Midday Grain Comments 05/11 10:56
Corn, Soybeans Up Double Digits at Midday
Corn is 14 to 16 cents higher with new crop 3 to 4 cents higher, soybeans
are 30 to 33 cents higher with new crop 16 to 18 cents higher and wheat 7 to 15
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 420 points. The U.S.
Dollar Index is 0.18 lower. Interest rate products are weaker. Energies are
narrowly mixed with crude up $0.20. Livestock trade is mixed with cattle
leading. Precious metals are mixed with gold down $5.90.
Corn trade is 14 to 16 cents higher on the front months, with new crop 3 to
4 cents higher as trade comes off early selling to work higher after the
washout Monday; volatile trade is likely to continue near term. Ethanol margins
will be supported by stronger unleaded values after the pipeline shutdown, with
corn values again limiting upside. Cooler weather short term after rains should
give way to warmer and wetter action by the end of the week. 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 Wednesday 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. Weekly crop
progress showed 67% planted versus 52% on the five-year average, and 20%
emerged versus 19% on average. On the July contract, chart resistance is the
fresh contact high at $7.35 3/4 with support the 20-day at $6.51.
Soybeans are 30 to 33 cents higher up front, with new crop 16 to 18 cents
higher with stronger spread action ongoing, while planting progress pushes well
ahead of normal. Meal is $6.50 to $7.50 higher and oil is 0.75 cent to 0.85
cent 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, but we are well ahead of pace with 42% planted versus 22% on average,
and 10% emerged versus 6% on average. 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 $15.10, with resistance the
upper Bollinger Band at $16.29 with the new high at $16.25.
Wheat trade is 7 to 14 cents higher with trade following the lead of the row
crops to rebound overnight with Minneapolis action leading as the Northern
Plains forecast works drier. KC is at 36-cent discount to Chicago with
Minneapolis now 17 cents above Chicago with intramonth spreads mixed. Seasonal
weather on the Plains should boost growth, with dry concerns for spring wheat
staying in place and some pockets of relief in recent days. Weekly crop
progress showed conditions 1% better at 49% good to excellent and 18% poor to
very poor for winter wheat, with 38% headed versus 46% on average, and spring
wheat 70% planted versus 51% on average, and 29% emerged versus 20% on average.
Other Northern Hemisphere weather will continue to be watched as well 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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