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DTN Midday Grain Comments     09/18 10:58

   Row Crops Score Fresh Lows At Midday, With Wheat Flat

   Midday sees row crops at fresh lows while wheat is flat to 2 cents higher.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are firmer with the DOW futures up 110. The 
interest rate products are firmer. The dollar index is 4 higher. Energies are 
higher with crude up .85. Livestock trade is mixed after early pressure. 
Precious metals are mixed with gold down $2.50. 


   Corn trade is 4 to 5 cents lower with trade falling to fresh lows at midday 
with selling pressure building during the day session. Wetter near-term weather 
may slow harvest progress in the center of the belt later this week. Ethanol 
margins remain tight with futures still on the low end of the range with more 
plants being idled, while the blender margins remain solid. Corn basis will 
likely see more pressure harvest here in the near-term. The weekly progress 
report showed steady conditions at 68% good to excellent, and 10% poor to very 
poor with 93% dented, versus 86% on average, 54% mature, 18% ahead of average 
and 9% harvested versus 6% on average. On the December chart support is at the 
low at $3.42 3/4 with the 10-day at $3.60 as resistance.


   Soybean trade is 9 to 10 cents lower with trade concerns and harvest helping 
to push trade into new lows. Meal is 3.50 to 4.50 cents lower and oil is 25 to 
35 points lower. Soybean basis is expected to see more pressure as storage 
space will be at a premium once harvest gets rolling with rain delays possible 
later this week. Crush margins remain even as meal fades from the highs, with 
August crush and soy oil stocks coming in well below expectations. Early 
planting in South America is underway with conditions on the dry side going in 
but no major concerns expected for a while and the Brazil and Argentina 
currencies remaining historically cheap with the Real falling back to the lows. 
U.S. and Brazil offers are near parity to China, even with the tariffs, with 
broader Asian export interest in recent days. The second round of trade aid is 
being targeted for early December with further tariffs announced Monday. Weekly 
crop progress showed conditions down 1% to 67% good to excellent and 10% poor 
to very poor, 53% dropping leaves, versus 36% on average and 6% harvested 
versus 3% on average. On the November chart support is fresh lows at $8.13 1/2 
scored this morning, with the 10-day at $8.34 and the 20-day at $8.42 noted 
resistance levels. 


   Wheat trade is flat to 2 cents higher with trade still working to build an 
uptrend, with trade failing to hold the overnight strength again as the row 
crops turned lower. The U.S. is still struggling to secure export business, but 
should be positioned better soon with world tenders solidly higher last week 
and support for domestic Russian prices. The U.S. dollar is at the bottom of 
the recent range. Russia will continue to work on spring wheat harvest and 
winter wheat planting with mixed moisture. Australia looks to have more mixed 
weather in the near term with longer-term dryness still an issue, as we get 
closer to harvest there and some frost in Western Australia. Matif Milling 
wheat is firmer Tuesday morning. The weekly crop progress should show winter 
wheat planting at 13%, 1% behind average and spring wheat harvest 97% complete 
versus 92% on average. Weekly export inspections were in line with recent weeks 
at 406,004 metric tons. On the December KC chart we have support at the lower 
Bollinger Band at $4.96 with resistance the 10-day at $5.17.

   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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