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DTN Midday Grain Comments     05/06 11:28

   All Grains Higher at Midday

   Wheat is the upside leader at midday with double-digit gains; dollar 
weakness is generating short profit taking. 

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are lower with the Dow index down 50 points. 
The interest rate products are lower. The dollar index is 90 points lower. 
Energies are mixed. Livestock trade is mixed with cattle lower and hogs higher. 
Precious metals are lower with gold off $5.

   CORN

   Corn trade is 2 to 3 cents higher at midday; May futures have been up as 
much as 8 cents. We have no carry in between May and July, illustrating slow 
farmer movement at the lower board prices. We are in May but no deliveries have 
been seen with the next available position/delivery date in November.  So 
although we have a bearish big picture fundamental argument the strong basis 
and carry out of the nearby market reminds of a great demand picture. Outside 
markets are supportive. Weather looks to keep the western belt damp in the near 
term, but with planting progress advanced past 50% it should be viewed as just 
as much of a benefit to production than a hindrance at this point. The weekly 
ethanol production report showed production down 3.69% and stocks down 0.17% 
with gas demand down 1.51% on the week. This has nearby ethanol futures up 
nearly 3 cents at midday. On the July chart we put in a new low for the move 
Tuesday at $3.55 which is support with $3.46 3/4 the next level below that 
which is the contract low printed on October 1. Resistance is at the 20-day at 
$3.74 1/2. 

   SOYBEANS

   Soybean trade is 1 to 2 cents higher at midday with spillover support from 
corn and wheat, meal is fractionally lower and bean oil steady to 5 lower.  The 
bean oils strength is the biggest friendly item this week with concerns about 
strikes in Argentina. Crush margins have improved from the uptick in protein 
oil values albeit margins are slightly lower at midday. Bean oil deliveries on 
the May contract were light at 333, but this is limiting upside following the 
large move up this week. The export market overall has been fairly quiet this 
week. The west will be slow in planting this week, but the south and east 
should pick up additional progress. On the July chart support is at the $9.82 
50-day with resistance at the $9.97 1/2 early April high, then the $10.09 
100-day moving average.

   WHEAT

   Wheat trade is 12 to 14 cents higher at midday and near the daily highs 
albeit momentum appears to have cooled. The dollar weakness is generating 
support and the Kansas Wheat Tour is showing yields. The weather with rains on 
the Plains is viewed as positive for crop development but increased disease 
concerns could pop up. The Kansas Wheat Tour had yields roughly a half bushel 
below last year's over the same area. Ongoing demand concerns will need to be 
eased to support a further rally near term. The July Kansas City contract has 
chart resistance at the 10-day moving average at $5.02 which we are flirting 
with at midday. Support is at the contract low printed Tuesday morning at $4.85.

   David Fiala is a DTN contributing analyst and the president of FuturesOne 
and a registered Trading Adviser. 
David Fiala can be reached at dfiala@futuresone.com 
Follow David Fiala on Twitter @davidfiala


(BAS)

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