DTN Midday Grain Comments 01/29 11:07
Grains Mixed at Midday
Row crops are slightly lower while wheat is higher in slow midday action.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed at midday with the Dow futures up 25
points. The interest rate products are higher. The dollar index is 19 higher.
Energies are lower with crude down 0.50. Livestock trade is mixed. Precious
metals are lower with gold down $25.
Corn trade is 2 to 4 cents lower at midday with follow-through selling from
the late day break yesterday below key chart support. Ethanol margins remain
fairly stable and very tight with the weakness of the energy complex. The
weekly export sales were stronger than expected at 1.07 million metric tons, so
we have seen two good weeks of sales reports. The lower board should give the
economics for additional good business, but the competition from South American
will also be an issue looking forward this year. March chart resistance is now
at the $3.77 100-day moving average with limited support below the market. If
we cannot get back above it today fresh chart selling and fund long liquidation
should not be a surprise as we head towards the close.
Soybean trade has seen two-sided trade, and is mixed at midday. Meal is $2
to $3 higher and oil is 60 to 70 points lower. South American weather remains
good with most of the concerns concentrated in Northern Brazil. Some of the
local crop forecasters have begun to scale back crop size projections slightly,
but overall expectations remain very large and most see that we are to a point
where it would be very hard to harm the crop. Soymeal continues to maintain an
inverse with good demand for the front month, and overall meal is the main
leader of the complex. The weekly export sales were much better than expected
at 888,200 metric tons of soybeans, 296,500 of meal, and 10,600 of oil. The
March soybean chart resistance is the 10-day moving average at $9.79, with
support at the new low for the move put in this morning at $9.66. Major support
is at $9.20 which is our contract low printed in early October.
Wheat trade has turned higher this morning, with gains of 5 to 10 cents
across the three exchanges at midday following better than expected exports.
Wheat is oversold, and we are seeing some light profit taking by shorts this
morning. The firmer dollar will continue to limit export demand, but Russian
restrictions take effect next week. The weakness of the Euro has made France
much more competitive than they have been recently as well. Warmer weather
across the Southern Plains will limit wheat stress but could encourage some
wheat to leave dormancy early, with dryness concerns starting to build a across
the plains as well. The weekly sales were stronger than expected at 544,400
metric tons. The March Kansas City 10-day and lowest major moving average, at
$5.64, serves as nearby chart resistance with limited support to note other
than $5 at this point.
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
Copyright 2015 DTN/The Progressive Farmer. All rights reserved.
Your local weather forecast from DTN can be sent to your email every morning free through DTN Snapshot