DTN Midday Grain Comments 07/13/07

Corn, Beans and Wheat All Lower at Midday

  It has been mostly a quiet morning on the grain floor; we are seeing lightly
lower prices at midday. Weather items look much like the weather picture on
Thursday. July contracts conclude trading at noon on this Friday the 13th.

By David Fiala
DTN Contributing Analyst

MARKET SUMMARY:

  The U.S. stock market indices are higher with the DOW scoring a new all-time
high and the S&P high of 1,563 is 11 points from the all-time high of 1,574
printed in March of 2000. The interest rate products are lightly higher. The
dollar index is 7 lower. Live cattle and lean hogs are mixed. Energies are
higher and precious metals are steady.

CORN:

  Corn trade has been lightly lower in slow trade; futures are currently down
2 and we have only traded from fractionally lower to just over 4 lower on the
day. The weather picture saw little change versus Thursday which has led to the
limited price movement. If noon forecasts hold any changes it will give the
market direction Friday afternoon. If no change is seen, traders lean toward a
lightly firmer close with short covering ahead of this important summer
weekend. Technically the short-term trend is now up and a higher close after
trading lower most of the session would look friendly as well heading into next
week. December corn now has resistance between $3.71 and $3.77 which is where
the 20-, 200-, 50- and 40-day moving averages lie. Outside market items are
lightly supportive with the strong stock market, higher crude and lower dollar.


SOYBEANS:

  Soybean trade is sitting lightly lower at midday with beans down 2 to 3,
meal down $1 and soybean oil down 10 points. Beans have traded just over a
penny higher to a dime lower, but most of the action was in the first ten
minutes of the day. Trade has been slow since. We did manage to sneak in a new
contract high before trading lower, so we saw new contract highs every day this
week. Our high Friday brought the futures just short of 50 cents higher on the
week and nearly $1.20 above the late June low. The technical trend remains up
but this market is very overbought. A bearish turn in the weather would be
expected to produce a limit or near-limit down day when or if it is seen. For
now the weather argument is supportive which will prevent sellers Friday
afternoon unless noon forecasts change the outlooks versus this those of Friday
morning.

WHEAT:

  Wheat trade is lightly lower at midday with trade 1 to 3 lower across the
three exchanges. This should continue to be a mixed day for wheat with trade
consolidating below the contract highs seen at the end of June. The Chicago
September contract has ranged from 5 1/2 lower to 2 1/2 higher. Volatility is
expected to stay high in this market in the bigger picture as you can argue a
scenario where wheat could still move to new highs due to tight global stocks
and good recent export demand. But you could also argue wheat could break a
buck on any lightly bearish news and still be at very good price levels. Iraq
has a small tender out there and India is expected to continue to buy wheat;
this should limit any major breaks near term as long as the row crops remain
firm.

  David Fiala

  David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Commodity Trading Advisor.