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DTN Midday Grain Comments     05/17 11:09

   Corn, Wheat Higher at Midday

   Corn and wheat remain bid on weather, with soybeans fading.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are higher with the Dow 55 points higher. The 
interest rate products are mixed. The dollar index is 10 higher. Energies are 
mixed with crude up 0.45. Livestock trade is mixed with cattle leading. 
Precious metals are lower with gold down 10.50. 


   Corn trade is 3 to 4 cents higher at midday with support from the continued 
wet forecasts with some planting progress this week, with more focus on 
potential acre losses coming forward with December corn unable to move through 
$4.00 so far. Drier weather will end for most going into the weekend. Ethanol 
margins are narrowing fast with ethanol futures unable to keep pace with the 
corn rally with slight gains this morning. Basis has seen selling pressure from 
farmer movement. On the July nearby chart support is the 100-day at $3.81 which 
we moved above overnight, with the 200-day at $3.87 the next level up.


   Soybean trade is 10 to 12 cents lower at midday with trade struggling to 
extend higher with fears of higher acres and poor demand along with spread 
unwinding. Meal is $4.50 to 5.50 lower and oil 35 to 45 points lower. Crush 
margins remain solidly positive. South American currencies remain cheap at the 
end of harvest, but rising basis is helping US offset somewhat. Field work 
should generally remain slow in the near term but more progress is likely into 
next week with little incentive for farmers to push right now. Trade talks are 
expected to continue, but more U.S. gov't payments to farmers looks to be the 
more likely outcome at this point with up to 20 billion in aid promised, and 
the exact set up still to be determined. The July chart support is the 10-day 
moving average at $8.25, with with the 20-day at $8.44 just above the market.


   Wheat trade is 2 to 6 cents higher at midday with the higher protein wheats 
leading, and the Kansas City/Chicago spread looking to put in a reversal. 
Europe and the Black Sea area will be watched with dryness in the Volga Valley, 
and wet weather in the U.S. potentially limiting planting and causing disease 
issues in the winter wheat. The dollar remains rangebound but firmer. Hard red 
wheat is working into feed rations in some areas with the bounce in corn 
values. On the July Kansas City chart, support is the 20-day at $4.05 that we 
moved above yesterday, with the 10-day at $4.04 below that, and the 50-day at 
$4.27 the next round higher which we have tested.

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


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