DTN Midday Grain Comments 03/23 11:15
Grains Trending Lower at Midday
Trade is slightly lower at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 70 points.
The interest rate products are lower. The dollar index is 15 points higher.
Energies are lower with crude down $0.30. Livestock trade is lower. Precious
metals are mixed with gold down $6.10.
Corn trade is flat to 2 cents lower in quiet midday trade with the market
continuing to chop around range bound. The weekly ethanol production report
showed production off 0.10%, and stocks were down 0.75%, and gasoline demand
was down 0.58% with ethanol futures edging slightly lower today. Corn basis is
expected to remain steady with bushels moving ahead of spring fieldwork,
although the incoming rain could turn focus back to corn movement. South
America does not have any major weather issues for corn in the near term
picture with early double-crop corn progress continuing to move along. The
chart picture remains negative in the short term with trade testing the low end
of the range. The weekly export sales were strong at 1.35 million metric tons
of old crop and 127,100 of new crop. On the May chart support nearby support is
the overnight low at $3.57 then the $3.52 late December low. Resistance is the
10-day at $3.62, then the 200-day at $3.68 1/2.
Soybean trade is 2 to 5 cents lower at midday with trade looking to retest
the lower end of the range. Meal is $1.50 to $2.50 lower and oil 15 to 25
points higher. South America looks to continue normal progress in the near term
with any weather issues limited. Crush margins will need to improve to drive
basis improvement as the export program slows seasonally with oil holding up
better than meal in this week. The strength in the Real has supported US export
competitiveness, which should limit near term downside despite rising
production estimates from Brazil. The weekly export sales were strong at
738,200 metric tons of old crop, 79,900 of new, 134,300 of old crop meal,
26,100 of new meal, and 15,300 of oil. 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.
Wheat trade is mixed at midday with Minneapolis showing the most strength
while the heavier rain seems to have shifted out of western Kansas for the near
term. New lows have been made in Kansas City trade by another 2 cents this
morning. 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 this morning, which is
supportive. The weekly export sales were OK at 418,500 metric tons of old crop,
and 149,800 of new. The protein spreads are favoring Minneapolis trade
overnight. On the May Kansas City contract support is the recent low at $4.29,
with resistance the 100-day at $4.43.
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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