DTN Midday Grain Comments 01/24 11:11
Grains Lower at Midday
Corn is 2 to 3 cents lower, soybeans are 4 to 6 cents lower and wheat is 4
to 8 cents lower at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 30. The dollar index is 15
points higher. Interest rate products are weaker. Energies are weaker with
crude down 1.60. Livestock trade is lower with hogs the downside leader.
Precious metals are mixed with gold 6.80 higher.
Corn trade is 2 to 3 cents lower at midday with trade pulling back from the
gains Thursday with broad ag weakness and overbought conditions. Ethanol
margins remain poor with the weaker corn values, but ethanol futures remained
mired at the lower end of the range. U.S. weather will likely limit short-term
movement in most areas with warmer weather expected to be on the way into the
end of the month. Basis should remain sideways to slightly firmer. The weekly
export sales showed improvement at 1.006 million metric tons (mmt), with
142,428 metric tons (mt) hitting the daily wire. On the March contract, support
is the 20-day at $3.87, with resistance the recent high at $3.93 3/4.
Soybeans trade is 4 to 6 cents lower at midday with trade continuing to bore
into resistance levels. The trade is waiting to see export sales, and South
America is not adding much support with good progress there. Meal is flat to
$1.00 lower, and oil was 20 to 30 points lower. The Brazilian real remains very
cheap, as well, hurting U.S. export competitiveness. South American weather
remains within the recent pattern for soybeans, as well, with early harvest
underway. Basis has remained steady at processors with the strong crush margins
and poor weather. Weekly export sales were led by products with 790,000 metric
tons of soybeans, 641,900 of meal and 55,600 of oil. The March chart support is
at $9.00 with psychological support there, and resistance is the lower
Bollinger band at $9.07.
Wheat trade is 4 to 9 cents lower at midday with Chicago trade the downside
leader this morning as we reverse further from the recent highs. The strong
dollar is adding pressure. Cold threats remain limited for the Plains with most
of the moisture staying to the east. Western snow cover remains limited, and
warmer temps are expected to return to most areas in the short term. KC is at
an 86-cent discount to Chicago, while Minneapolis is back to a 20-cent
discount. Weekly export sales improved at 696,000 metric tons. The March KC
chart support is the 20-day moving average at $4.86, which we are testing at
midday. Resistance is the upper Bollinger band at $5.03.
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 him on Twitter @davidfiala
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