DTN Mid-day grain comments 7-11-07

   Corn, Soybean Futures Slightly Lower at Midday; Wheat Sees Gains

  Corn and beans are lightly lower at midday and have been mixed this morning.
Wheat is seeing moderate gains due to noted short covering ahead of the USDA
Supply and Demand report due on Thursday at 7:30 a.m. cst.

By David Fiala
DTN Contributing Analyst

MARKET SUMMARY:

  The U.S. stock market indices are higher. The interest rate products are
lower. The dollar index is 4 lower. Live cattle and lean hogs are mixed.
Energies and precious metals are lightly lower.

CORN:

  Corn trade has been mixed in slow trade with the December ranging from 2 1/2
higher to 3 1/2 lower; we are near the daily lows at midday. This is some
consolidation trade, which is considered normal for pre-report trade, but
surprisingly narrow, as this has not been a normal year. Corn trade moved to
the highest level in seven days this morning, and on Tuesday closed above the
10-day moving average for the first time since June 18 when we printed our June
high.  The move on the chart could spur on short covering ahead of the monthly
USDA report, but so far little has been seen. The trade is expecting higher new
and old crop carryover numbers on the report. The trade will be looking for old
crop carryover around 1.04 billion bushels, and new crop carryover should be
between 1.35 and 1.4 billion. Both of these numbers are negative month to
month, but have been at least partially priced into the market with our large
decline from mid-June to early July. Weather items appear lightly supportive
versus Tuesday. Outside market influences are flat.

SOYBEANS:

  Soybean trade is down a penny at midday, meal is steady and soybean oil is
down 10 to 15 points. We are seeing consolidation around the fresh contract
highs with the November range 2 1/4 lower to 5 1/2 higher. New contract highs
were seen today, but we are back below the previous high here at midday. The
forecasts appeared slightly warmer and dryer than Tuesday, which is a pattern
that is supportive for the market. But noon outlooks will most likely determine
where we close. There does need to be some nervous shorts around with an
expected supportive monthly USDA report Thursday afternoon, questionable
weather plus a positive chart (although we are getting overbought). The trade
is expecting an old crop carryover number just under 600 million bushels and a
new crop carryover just over 200 million. If the new crop carryover number
would be below 200, it would surely have everyone talking about $10 prices.

WHEAT:

  Wheat is seeing some solid gains at midday, with the September contracts up
14 cents in Chicago and up 9 cents in Kansas City and Minneapolis. Support is
from an absence of sellers ahead of the USDA production figures. The weaker row
crops at midday are noted limiting gains. The midday price on September Chicago
futures is $6.15, which is 45 cents below our one-month high and 41 cents above
our low on July 3, so we are virtually in the middle of our recent range. The
average trade guess for all U.S. wheat production is 2.16 billion with a range
between 2.033 and 2.238 billion. The average spring wheat estimate is 490
million bushels, and the average trade guess for all winter wheat is at 1.584
billion bushels. The trade is expecting a carryover around 465 million bushels.
Traders look for sideways and active trade the remainder of the day.

  David Fiala