DTN Midday Grain Comments 10/07 11:19
All Grains Down at Midday
Grain trade is lower at midday with longs taking off some positions ahead of
the USDA report Friday morning.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are mixed with the Dow futures up 15 points. The
interest rate products are higher. The dollar index is 14 points lower.
Energies are higher with crude up 1.00. Livestock trade has cattle lower, and
hogs higher. Precious metals are lower with gold down $5.
Corn trade is 3 to 4 cents lower at midday with long profit taking
occurring. Ethanol futures are lower at midday despite higher crude and
unleaded trade but the fact ethanol futures are a premium to unleaded warrants
lower discretionary blending. The monthly WASDE report coming up tomorrow
morning will be watched closely and should trigger some position squaring ahead
of it. The average trade guess is for a 13.505 billion bushel crop versus
13.585 billion on the September report, the range of estimates is 13.28 to
13.799. The carryover is expected to slip to the 1.535 billion bushel area
versus the 1.592 September number. The weekly export sales were mediocre at
519,700 metric tons. On the nearby December chart nearby support is the 100-day
moving average at $3.88, then the 20-day at $3.87. Resistance is at the 200-day
Soybean trade is 7 to 11 cents lower with trade giving back the light
midweek gains. Meal is $2.50 to $3.50 lower, and oil is 15 to 25 points lower.
Harvest progress should continue rapidly with warm temperatures and fairly open
weather. The average trade guess is looking for a 47.2 yield versus 47.1 on the
report last month, but lower acreage so the production estimate is at 3.91
billion versus 3.935 on the September report. The carryover estimate is at 415
million bushels versus 450 on the September report. The weekly export sales
were good at 1.28 million metric tons for this year, 995,600 for next year,
275,500 of meal, and 15,000 of oil. USDA announced 20,000 metric tons of soy
oil sold to unknown as well. On the November chart the contract low at $8.53
1/4 is long-term support with the 20-day moving average at $8.80 nearby
support, which we have held at midday. Upside resistance is at the $8.99 50-day
then the $9.02 high seen last week.
Wheat trade is 3 to 6 cents lower across the three contracts at midday with
the weaker row crop trade adding pressure. International weather is a growing
question mark with Australia mostly in focus with heat in the near term, but
ample world supplies will limit concerns. Focus on corn and soybean harvest
activity and the low wheat prices may limit winter wheat plantings this month,
and wheat likely needs to buy additional acres. The WASDE report is expected to
show some reduction in wheat carryout after the stocks and production reports
were below expectations. The average carryover estimate is at 820 million
bushels versus 875 million on the September report. The weekly export sales
were soft at 288,200 metric tons. On the Kansas City December chart support is
at the 10-day at $5.03 and 20-day moving average at $4.96 with resistance at
the $5.20 7-week high reached this week then the $5.33 100-day moving average.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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