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DTN Midday Grain Comments     07/16 12:11

   Grains Lower at Midday

   Broadly weaker trade at midday with the forecast remaining in flux.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are flat with the Dow 6 higher. The dollar 
index is 39 higher. Interest rate products are firmer. Energies are flat with 
crude $0.05 lower. Livestock trade is mixed. Precious metals are firmer with 
gold $1.50 lower.


   Corn trade is 6 to 8 cents lower at midday with selling continuing after the 
improvement in forecast and crop conditions ahead of the late-week heat, 
although trade was able to firm off the lows. The forecast will continue to 
draw attention as more of the crop pollinates with mostly dry conditions 
expected to continue with the second week cooler for most and some showers 
today. Ethanol margins will remain tight with futures slipping this morning. 
Harvest should be on the downhill slide for Brazil with more signs of imports 
into the SE U.S., with mixed conditions elsewhere. Basis remains very strong 
across a variety of areas, especially the East with intramonth spreads softer 
to start the week. Mexico is considering subsidies to promote domestic 
production coming forward as well. Weekly crop progress showed 58% good to 
excellent, 12% poor to very poor, up 1 percentage point on the week, silking 
was 17% vs. 42% on average. On the September nearby chart support is at the 
50-day at $4.22 with further resistance the 10-day at $4.38.


   Soybean trade is 10 to 12 cents lower at midday with a lack of a demand 
story continuing to limit upside. Meal is $2.50 to $3.50 lower with oil 10 to 
20 points lower. Crush margins remain positive with meal and oil regaining the 
lead today but NOPA crush came in 5 million bushels below expectations at 149 
million. World export demand remains slow, with the real setting back sharply 
today to hinder export ability. Weather will come into focus more as we head 
towards August and podfill season. Weekly crop progress was up 1 percentage 
point at 54% good to excellent, and 12% poor to very poor, with 95% emerged vs. 
100% on average, and 22% blooming vs. 49% on average. The September chart 
support is the 50-day at 8.80, with the next level up the 100-day at 8.97 which 
we fell below overnight.


   Wheat trade is flat to 2 cents lower with trade following the lead of the 
row crops today with some light two sided trade at times. The Kansas 
City/Chicago spread is steady this morning. The corn/HRW spread has widened 
again this morning. The warmer weather should allow harvest to progress to move 
to the home stretch, while Europe makes progress, and the Black Sea continues 
to see mixed yields with Russian estimates moving lower again this week. The 
dollar is just below 97 on the index with firmer action today. Weekly crop 
progress showing wheat harvest at 57% vs. 71% on average, with spring wheat 76% 
good to excellent, and 4% poor to very poor, down 2 percentage points, with 78% 
headed vs. 87% on average. The September Kansas City chart support is the 
recent low at $4.39 with the first resistance the 10-day at 4.46 1/2, which we 
are just above at midday.


   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered adviser
He can be reached at dfiala@futuresone.com 
Follow him on Twitter @davidfiala


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