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DTN Midday Grain Comments     06/19 11:22

   All Grains Lower at Midday

   Trade remains lower at midday, but has bounced significantly off the lows.  

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are lower with the Dow down 280 lower. The 
interest rate products are lower. The dollar index is 20 points higher. 
Energies are lower with crude down $1.00. Livestock trade is mixed with cattle 
leading. Precious metals are lower with gold down $2.70.


   Corn trade is 1 to 3 cents lower at midday with the escalating trade tension 
and near-term rains keeping the pressure on the market, but are 12 cents off 
the lows of the day. Harvest should continue to expand in the double-crop areas 
of Brazil with open weather. Ethanol margins are stable with lower corn and 
energy prices with ethanol futures touching $1.38, which provides very strong 
blender margins with unleaded over $2.00 still. Basis has been flat to firmer 
in recent days with the lower board. Weekly crop progress showed improvement to 
78% good to excellent and 4% poor to very poor with emergence at 98% vs. 97% on 
average. On the July chart we remain below the 10-day, at $3.72, which is now 
nearby resistance and then the 200-day at $3.82. Nearby support is the $3.38 
3/4 fresh low from this morning. 


   Soybean trade has fought back to the overnight levels, down 23 to 28 cents, 
with trade getting close to limit-lower trade early on in the session as China 
pledged to stay firm in the trade war. Meal is $3 to $4 lower and oil is 60 to 
70 points lower. Bean basis has remained steady to firmer, with trade likely to 
remain quiet in the near term as old crop exports remain slow with Brazilian 
values rising rapidly on the anticipation of increased Chinese business. 
Widespread rains should boost near term growth. Brazil continues to struggle 
with the logistical issues compounded by the trucker strikes with a large 
shipping line up. Weekly crop conditions were 1 percentage point lower at 73% 
good to excellent, and 5% poor to very poor with planting at 97% complete vs. 
91% on average, with 90% emerged vs. 81% emerged. On the July chart, trade has 
support at the fresh low at 8.41, and resistance the 10-day at $9.40.


   Wheat trade is 10 to 18 cents lower with spillover pressure from the row 
crops, and harvest pressure continuing. Wet weather for Kansas should slow 
harvest in the next week or so, but good progress is likely through today with 
much of the areas east of U.S. Hwy 81 complete. Spring wheat should see good 
progress with Canada remaining drier. Australia should see some improvement but 
overall remains mixed. Russian winter wheat is likely to remain on the dry 
side, with the spring wheat cool and wet. HRW basis has remains solid ahead of 
the anticipated harvest protein improvement and board weakness. Weekly crop 
progress had winter wheat 1 percentage point better at 39% good to excellent, 
and 33% poor to very poor with 91% headed same as average, and 26% harvested, 
vs. 19% on average. Spring wheat was 8% better at 78% good to excellent and 4% 
poor to very poor, with 9% headed vs. 12% on average. On the July chart, Kansas 
City is back below all the major moving averages with the 200-day at $4.96 the 
closest to the market, and $4.71 becoming support as the fresh low.

   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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