DTN Midday Grain Comments     05/20 11:25

   Grain Trade Mixed at Midday

   Old crop beans are slightly positive, but most all else is lower on expected 
good planting progress. 

By David Fiala
DTN Contributing Analyst

General Comments

   The U.S. stock markets are flat to higher with the Dow up 15. The interest 
rate products are higher. The dollar index is 31 lower. Energies are higher 
with crude up $.90. Livestock trade is mixed. Precious metals are mixed with 
gold down $4. 

   CORN

   Corn trade is soft at midday with old crop down 4 to 6 and new crop steady 
to 2 lower. Outside markets are fairly neutral. The bull spread trade has 
softened a bit with announced increases to spread margins. New crop has sagged 
under the expectations of rapid planting progress this past week. Many in the 
trade expect progress to be 70% complete at this point, even if the USDA is 
reluctant to move progress over 60% on the weekly report due out this 
afternoon. Rains will continue to work through the next few days and could 
create more disruptions in the Northern Corn growing areas. For corn that is in 
the ground, the rains are not a bad thing. In addition, the weather forecast 
seems to be leaning towards above normal temps in the near to medium term, 
which will be initially bearish, allowing plantings. But some hot weather with 
dry forecasts, if seen, would start getting drought concerns up. After a year 
like last year, the trade should be very sensitive to hot dry forecasts this 
year. On the chart July corn has resistance in the $6.58-$6.60 area in the near 
term and support at $6.40. Weekly export inspections edged up a bit to 14.55 
million bushels.

   SOYBEANS

   Soybean trade is flat to 4 higher on old crop, and 11 to 14 lower on new 
crop with old crop tightness behind the bull spread advancement. Meal is $3 to 
$4 higher, and oil is flat to 10 lower. On the July soybean chart we have moved 
above the 200-day moving average at $14.32 and found resistance at $14.50 but 
have been able to work through that area at midday, the next upside target is 
$14.83 which is the 7 month high. South American harvest is nearly complete, so 
trade will be watching to see if they can maintain a strong shipping pace, and 
to see if Chinese crush margins improve from the residual effects of the bird 
flu that has compressed margins. Planting progress on beans is expected to move 
into the 25-30% range on the report this afternoon. Weekly export inspections 
remained low again this wee coming in at 3.32 million bushels.

   WHEAT

   Wheat is steady to 6 lower at midday across the three exchanges. The 
Minneapolis contract is firmer versus the winter wheat contracts due to the 
wetter forecast for the spring wheat areas. Russian forecasts have improved 
adding further pressure to the market, and parts of the U.S. hard wheat belt 
saw good moisture this weekend, however, the most stressed areas missed rains 
again. Chartwise, wheat could see further pressure towards the $6.65 area on 
the July Chicago. Poor weather for the hard red wheat belt should support 
spreads. There is further talk that China and Egypt are interested in further 
wheat imports in the near term. The weekly export inspections slipped slightly 
versus last week to 21.15 million bushels. Crop conditions are expected to 
remain fairly stable on the week, and spring wheat planting should have made 
significant progress the past week.

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered Trading Adviser


(BS)

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