DTN Midday Grain Comments 05/11 10:52

DTN Midday Grain Comments 05/11 10:52 All Grains Lower at Midday Trade is slightly lower across the board at midday. By David Fiala DTN Contributing Analyst General Comments The U.S. stock market indices are lower, with the Dow futures down 100. The interest rate products are lower. The dollar index is 50 points lower. Energies are higher with crude up $1.25. Livestock trade is mostly higher. Precious metals are higher with gold up $10. CORN Corn trade is 2 to 4 cents lower at midday with trade following the weakness in the soybean pit so far. The USDA old crop carryover was at 1.803 billion bushels versus 1.825 expected. New crop carryover was at 2.153 billion bushels, versus 2.228 expected but well above the low side estimate of 1.641. Global old-crop carryover came in at 207.87 million metric tons versus 206.20 expected and old crop at 207.04 versus 210.40 expected. Global usage is 55 million tons greater than 2015-16, and domestic usage 535 million bushels higher which is a 4% increase. This will be what market bears will question this week, especially since the world wheat supplies continue to grow but wheat only saw a small usage increase. The weekly ethanol production report was supportive with production up 4.23%, and stocks down 4.27% with ethanol margins finding broader support this week. On the July chart we rallied up to the $3.83 20-day and found resistance after the report, the 200-day at $3.85 1/2 is the highest major moving average. Support is now at the $3.74 100-day which we have not tested yet today. SOYBEANS Soybean trade is 7 to 10 cents lower at midday with buying fading overall after the strength yesterday. We are holding the bulk of the gains though. Meal is down $1 to $2 and bean oil is narrowly mixed. The old crop domestic carryover was reduced to 400 million versus the 428 million bushel number expected, new crop was only 305 million bushels versus 427 expected, after 440 on the outlook forum from February. Total soybean usage was up 175 million versus 2015-16 and up 63 million from 2014-15. The global carryover was at 74.25 versus 76.1 million metric ton expected, and new crop at 68.21 versus 73.4 million metric ton expected. Global usage was up 15 million tons, so expected increases in demand are behind our strength. There was a 3.5 million tons drop in the Brazilian and Argentine production combined which has been supportive but not a big surprise. The Brazilian government agency CONAB cutting soybean production to 96.9 million metric tons, which should have the market expecting a light decrease on the June numbers. The USDA announced 30,000 metric tons of soy oil sold to unknown. Resistance on July beans is at the $10.91 high post report, then $11. Support is at the $10.40 10-day then the $10.20 20-day, giving trade a pretty wide range between support and resistance. WHEAT Wheat trade is 1 to 5 cents lower across the three contracts with weaker row crop trade limiting buying enthusiasm after the USDA reiterated large supplies yesterday. The dollar has turned sharply lower this morning which should add support if it continues to work lower after the recent rally. The old crop wheat carryover was as expected at 978 million bushels. New crop was at 1.029 billion bushels versus 991 million expected. The old crop global carryover was at 242.91 million metric tons versus 239.6 expected. Global new crop carryover was up at 257.34 million tons versus 243.60. World wheat usage was only 3% greater year on year, and domestic usage was up 130 million over last year yet the carryover is up nearly 50 million at 1.029 billion. The all wheat production number was at 1.998 billion versus 1.975 expected. The July Kansas City chart has resistance at the $4.59 10-day with support to mention limited due to our downside momentum that has only been stopped by spillover support. The USDA numbers were bearish for wheat, but bulls will argue contract lows price-in bearish info. - David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered trading adviser. David Fiala can be reached at dfiala@futuresone.com Follow David Fiala on Twitter @davidfiala (BAS) Copyright 2016 DTN/The Progressive Farmer. All rights reserved.