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DTN Midday Grain Comments     09/30 10:48

   Grain Futures Lower at Midday

   Grain futures are lower at midday ahead of the Quarterly Grain Stocks report 

By David Fiala
DTN Contributing Analyst

General Comments

   Grain futures are lower at midday ahead of the Quarterly Grain Stocks report 
release. U.S. stock market indices are higher with Dow futures up 70. Interest 
rate products are higher. The dollar index is 31 higher. Energies are lower 
with crude down $2.50. Livestock trade is mixed with cattle mostly lower and 
hogs higher. Precious metals are lower with gold down $7.50.  


   Corn futures are flat to 2 cents lower in quiet trade at midday. Outside 
markets are negative with the dollar sharply higher on lower-than-expected 
inflation in Europe. Rains look to slow harvest progress over the next three 
days before a more open pattern resumes. The weekly crop condition and progress 
report showed conditions unchanged at 74% good to excellent, maturity at 60% at 
70% average, and harvest at 12% vs. 23% on average. On the December chart 
resistance is at $3.35 3/4. Support is now $3.20 with another new contract low 
printed at $3.22 on the December. Looking to later this morning when USDA will 
release the September Quarterly Stocks report, final wheat and revised soybean 
production number. The average trade guess for the corn September 1 Quarterly 
stocks (which is also the old-crop ending stocks number) is 1.185 billion which 
is 4 million above the September USDA WASDE number. The range of estimates is 
1.02 billion to 1.35 billion.  


   Soybean futures are 8 to 11 cents lower at midday with selling resuming 
after the bounce Monday. Meal is $2 to $3 lower, and oil is 40 to 50 points 
lower. On the November chart support is $9 with the lowest major moving 
average, the 10-day, noted resistance at $9.39. The weekly crop progress report 
had conditions up slightly to 72% good to excellent, dropping leaves at 69% vs. 
72%, and harvested at 10% vs. 17% on average. Rains will likely slow harvest in 
the near term, while South American planting continues to progress. This year 
the significance of the September 30 stocks report is muted due to the 
expectations of a huge record 2014 crop. The average trade guess for the 
September USDA Quarterly stocks is 126 million bushels with a range of 100 
million to 150 million. The final soybean crop revision is expected to come in 
at 3.362 billion with a range of 3.29 billion to 3.4 billion versus the 
September 3.289 billion USDA number.


   Wheat futures are 7 to 10 cents lower across the three contracts at midday, 
giving back the gains from Monday with the dollar streaking to new highs yet 
again. The weekly progress report had spring wheat harvest at 94% vs. 96% on 
average and winter wheat planting 7% ahead of average at 43%, and emergence 3% 
ahead of average at 14%, which should add a little pressure but it is too early 
to get real excited about U.S. progress. Wheat is oversold on the charts with 
limited chart support to mention other than the contract lows. First resistance 
on the KC December contract is at the 10-day moving average at $5.65. Looking 
to the report, the average trade guess for the September quarterly wheat stocks 
is 1.88 billion bushels with a range of 1.7 billion to 1.98 billion. The 
domestic 2014 all wheat production estimate is 2.04 billion with a range of 2 
billion to 2.075 billion bushels.  

   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


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