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DTN Midday Grain Comments     07/18 11:25

   Grains Lower at Midday

   Corn is the downside leader with broad weakness at midday.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are weaker with the Dow 120 lower. The dollar 
index is 5 lower. Interest rate products are mostly higher. Energies are lower 
with crude 1.90 lower. Livestock trade is mixed with hogs leading. Precious 
metals are mixed with gold 3.10 higher.


   Corn trade is 10 to 12 cents lower at midday with better than expected rains 
and little fresh bullish news to support the market near term. Warm weather 
will linger in the near term, but better than expected rains have shown up in 
spots. Ethanol margins will remain tight with plentiful supply and summer 
driving season coming to an end and ethanol futures back below $1.45 a gallon. 
Harvest should be on the downhill slide for Brazil with more signs of imports 
into the SE U.S., with mixed conditions elsewhere. Basis has started to 
moderate in some areas as well, with intramonth spreads firmer even with the 
weakness this a.m. The weekly export sales remain disappointing at 200,009 
metric tons of old crop, and 132,997 of new crop. On the September nearby 
chart, support is at the 50-day at $4.25 which we have tested this morning with 
resistance the 10-day at $4.39, which we tested but did not hold.


   Soybean trade is 2 to 4 cents lower at midday, following the lead of the 
corn with some moments of two sided trade. Meal is flat to 1.00 lower, and oil 
is flat to 10 points lower. Crush margins have narrowed but remain positive. 
World export demand remains slow, with the ral still cheap vs. the dollar with 
some gains overnight. Weather will come into focus more as we head towards 
August and podfill season. The weekly export sales remain soft at 127,890 
metric tons of old crop, 198,327 of new, 65,827 metric tons of old crop meal, 
149,500 of new crop meal, and 12,193 of oil. The September chart support is the 
50-day at 8.82, with the next level up the 100-day at 8.97, with the 20-day the 
next round at $9.01.


   Wheat trade is flat to 8 cents lower with early strength fading again as 
harvest continues along with pressure from the row crops. The Kansas 
City/Chicago spread is slightly narrower this a.m. The corn/HRW spread has 
narrowed as well. 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 as harvest rolls on. The dollar is just below 97 on the 
index with weaker action today. Weekly export sales remain soft at 347,920 
metric tons. The September Kansas City chart support is the recent low at $4.32 
with the first resistance the 10-day at 4.47, which we failed to hold with the 
100-day at 4.51 the next round up.


   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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