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DTN Midday Grain Comments 03/21 11:29
All Grains Higher at Midday
Corn leads trade at midday with firmer action developing.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow 160 points higher. The
interest rate products are mixed. The dollar index is 65 points higher.
Energies are mixed, with crude 0.10 higher. Livestock trade is firmer led by
hogs. Precious metals are firmer with gold down 8.80.
Corn trade is 4 to 5 cents higher at midday with better buying developing
during the day session. Midwest weather issues are hindering demand and
movement, which will continue for a bit with a wet start to April expected for
much of the belt. South America crop progress should remain uneventful in the
near term with Brazil trending drier for double crop corn but it remains early.
Ethanol margins have improved this week, but remain tight with the effects of
production disruptions still likely a little way off, and flat to slightly
higher futures this a.m. Corn basis will be mixed depending greatly on local
conditions. The slow start to fieldwork will continue to be watched in the near
term with fertilizer logistics likely to be a major issue. The weekly export
sales were improved at 855,900 metric tons of old crop, and 90,000 of new. On
the May chart support is the 10-day at $3.68 which we bounced from this
morning, with the next level of resistance the 20-day at $3.71 3/4 being taken
out this morning, and the 50-day at 3.80 the next round up.
Soybean trade is 2 to 3 cents higher with trade remaining firmly range bound
between $9.00 and $9.10 with two-sided trade continuing. Meal is $1.50 to $2.50
lower, and oil is 10 to 20 points lower. Trade news has been quieter this week
with no major reports. South America weather should maintain the recent pattern
in the coming days with Brazil harvest moving along and normal progress in
Argentina. Crush margins remain strong overall with meal still hanging near
$310 a ton with support coming back into the market at midweek. The weekly
export sales were soft at 399,500 metric tons of old crop soybeans, -64,400 of
new, 97,500 of meal, and 5,500 of oil. On the May chart support is the $9.01
3/8 10-day moving average, with the 20-day at $9.07 3/8 the next level up,
which we are just above at midday, with the 100-day at $9.17 the next round up.
Wheat trade is flat to 3 cents higher with trade fighting off the overnight
selling and sharply stronger dollar to move higher during the day session
again. Trade is still focused on easing oversold conditions with the large fund
short remaining in place with planting season coming up for spring wheat, and
weather likely to remain challenging. Export news will be focused on in the
near term with exports potentially slowing from the Black Sea area with the
weekly sales a little soft at 298,600 metric tons of old crop, and 138,800 of
new. Warm plains weather will pull the crop out of dormancy with generally good
conditions so far. Wheat basis varies widely on product and location. On the
May Kansas City chart, support is the 20-day at $4.41 that we closed above
yesterday with the 10-day at $4.36 below that, with the upper Bollinger band
the next round up at $4.63.
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
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.
May corn finished up ¼ of a cent, May beans up 2 cents, and May wheat up 8 1/4 cents. Dovish comments by the Fed were the biggest news around the trade today. The weaker dollar helped wheat find some more support that created some buying that spilled over into corn and beans. Headlines about a trade deal coming along nicely according to President Trump didn’t bring out buyers. The news is old and the market is tired of it. Today was the 7th consecutive day with no daily export sale announced and the bearish impact seemed to be limited due to the rally in wheat. According to Reuters the US producer has found some company in the Argentine farmer who is not marketing what is expected to be a 55MMT soybean crop because the Chicago board is too low. Managed money shorts, no export announcements, and delays regarding the trade deal are weighing on prices and farmers continue holding out for good (read bullish) news.