DTN Midday Grain Comments     05/24 11:11

   Mixed to Lower Trade in the Grain Market at Midday

   Mixed action at midday with position squaring ahead of the long holiday 
weekend. 

By David Fiala
DTN Contributing Analyst

General Comments

   The U.S. stock markets are lower with the Dow futures down 75 points. The 
interest rate products are higher. The dollar index is 14 lower. Energies are 
lower with crude down $0.80. Livestock trade is mixed. Precious metals are 
lower with gold off $5.  

   CORN

   Corn trade is 1 to 3 lower on old crop and 4 to 6 lower on new-crop forward 
contracts at midday. Position squaring ahead of the weekend has longs easing 
off new-crop length, and shorts easing out of old crop. We have two and a half 
weeks yet before we see the June World Agricultural Supply and Demand Estimates 
on June 12. Then an all-important stocks report at the end of June. The crop is 
slow so its hard to expect many changes on the June report. Demand has been 
good for ethanol and feeding illustrated by our strong basis. The fact futures 
slipped a buck following the bearish March stocks report is input enough to 
have market bulls geared up to expect a friendly stocks number at the end of 
June. That is if the old economic argument of lower prices encourages usage has 
held true. Most expect trade to remain slow the rest of the day. On the charts 
the December contract did trade up to the $5.37 20-day moving average yesterday 
which was an upside target and 25 cents above our weekly low. Expect buy stops 
above this level if we find a reason to go back there. The July futures closed 
above the 20-day and 50-day the past two days, so chart buying should happen 
there, but so far a slow go of it today. The top of the post March Quarterly 
Stocks report downside chart gap is $6.76, and the July contract 100-day up at 
$6.80. This area sets a good upside near-term target\resistance level. The firm 
cash trade provides fundamental support to the friendly chart action this week. 

   SOYBEANS

   Soybean trade is firm in slow action at midday beans are 5 to 6 higher 
across the board. Meal is $1 lower on July to $3 higher on new crop and bean 
oil is sitting 5-10 lower. July futures have been active moving from round 15 
loewr to 5 higher but trade has slowed at midday. Traders are noting today as 
position squaring ahead of the long weekend. July saw an explosive upside move 
yesterday, but slipped late providing the appearance of a reversal. This has 
longs exiting, but the tight old-crop scenario should remain something that 
provides upside arguments to the old crop. November also broke out to the 
upside yesterday, but found resistance at $12.50. At midday we are just below 
this level on November. Unless the market perceives weather problems, the 
market may have a hard time not falling lower on hedging and long profit taking 
ahead of the holiday weekend. 

   WHEAT

   Wheat trade is 3 to 5 lower across the three exchanges at midday. Futures 
have been mixed with trading ranges of about a dime in all three markets. This 
illustrates no one is looking to do much today. The export buzz this week 
should limit selling this afternoon. The combined weekly sales report yesterday 
around a million metric tons was a plus for the bulls. If we can put together a 
strong three to four weeks of sales around that level it may help this market 
go higher on its own. Production concerns remain valid, but with our 
comfortable balance sheets we can afford some problems and short falls in 
production. On the July Chicago chart we ran up to the 50-day and 20-day 
yesterday and found resistance in this $7.05-8 area again.

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered Trading Adviser


(BS)

Copyright 2013 DTN/The Progressive Farmer. All rights reserved.