DTN Midday Grain Comments 03/22 11:41
Mixed Trade in Grains at Midday
Wheat is mixed with corn and beans lightly lower in slow midday trade.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow futures down 45 points.
The interest rate products are higher. The dollar index is 8 points lower.
Energies are lower with crude down $0.40. Livestock trade is mixed with cattle
sharply higher and hogs lightly lower. Precious metals are mixed with gold up
Corn trade is 2 cents lower in quiet midday trade, but we are at fresh
two-month lows here at midday so additional long liquidation is possible. The
weekly EIA report had stocks 0.75% lower with production 0.1% lower with 0.58%
reduction in gas demand. Ethanol futures are a penny higher so with corn lower
this is a positive move in board margins at midday. This may limit downside in
corn along with the firm cattle trade. Fear of losing corn acres should also
continue to limit downside, albeit it is not stopping us from moving lower. On
the May chart support nearby support is at the $3.52 late December low.
Resistance is the 10-day at $3.63 1/2.
Soybean trade is 3 to 5 cents lower at midday is slow trade with both nearby
May and new crop November contracts trading just $10 but not accelerating to
the downside. Meal is $1 lower and May soybean oil is down 35 points. Limited
weather issues to talk about and with crush margins needing some improvement
there is insufficient supportive news to take beans higher here. The strength
in the Real has supported US export competitiveness which should limit near
term downside despite rising production estimates from Brazil with some private
sources up to 111 million metric tons. On the May soybean chart support is at
the $9.92 low printed on last week, resistance is at the 10-day and lowest
major moving average at $10.02. Our low this morning has been within 2 cents of
support; the trade expects sizeable sell stops below the $9.92 4-month low and
below the $9.90 level.
Wheat trade is mixed at midday in slow trade, the daily ranges have only
been 5-7 cents on most contracts. Minneapolis is 2 cents higher here and the
winter wheat contracts 2 cents lower. New lows for the move, and new 2-month
lower were made on Kansas City trade but follow-through selling has been
limited here as of midday. The recent warmer weather has stressed the crop on
the plains but concerns are limited at the moment with the rains expected to
limit damage. The dollar remains below the 100 mark on the index which appears
to be limiting downside. The protein spreads are again favoring Minneapolis;
Minneapolis has gained over 30 cents on Kansas City this month with the spread
getting near the most inverse over Kansas City in a month but still around 20
cents from the high in the spread reached approximately 3 months ago. On the
May Kansas City contract support is the daily low at $4.33 1/2, with resistance
the 100-day at $4.44.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at email@example.com
Follow Fiala on Twitter @davidfiala
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