DTN Midday Grain Comments

General Comments

The U.S. stock market indices are mixed with the Dow futures up 25 points. The interest rate products are higher. The dollar index is 35 points lower. Energies are higher with crude up 0.70. Livestock trade is mixed with cattle leading. Precious metals are mixed with gold up 18.10.

CORN

Corn trade is 4 cents lower at midday with soybean weakness helping to drag trade lower. The weekly ethanol production report showed production down 21,000 barrels per day, stocks were 169,000 barrels higher, with gasoline demand showing growth with the warm weather. Double crop planting in Brazil will continue to expand in coming days. Basis remains soft, but better bids have surfaced in some areas into March. The USDA outlook forum this week will shine more light on expected 2017 acre figures with some information starting to come out today with the baseline corn acre guess at 90 million acres Support is at the $3.68 20-day and $3.66 200-day which we are tested yesterday, with resistance now at the $3.72 10-day followed by the $3.80 high.

SOYBEANS

Soybean trade is 6 to 9 cents lower at midday with soybeans continuing to drift lower as South American harvest progress continues in Brazil, and Argentina continuing to mature. Meal is $2 to $3 lower and oil is 30 to 40 points lower. Crop size expectations remain strong for Brazil with harvest gaining speed, with more eyes turning to logistics and currency issues to see what kind of pace they can sustain. The slide in oil values has hurt crush margins, which has helped to keep basis soft. The outlook forum pegged bean acres at 88 million reflecting the expected increase in acres. On the March soybean chart support is now at the $10.18 200-day which we are testing this morning and then $10.00 and resistance at the 50-day at $10.34.

WHEAT

Wheat trade is narrowly mixed at midday with Minneapolis and Kansas City trade leading overnight. The weaker dollar should add support, with the softer row crop trade limiting upside this morning. The winter wheat should continue to gain vs. the spring wheat with protein issues moving to the back burner for now. The warm stretch will continue to raise concerns about breaking dormancy. Kansas, Oklahoma, and Texas caught some rains over the weekend, but western Kansas remains drier. On the March Kansas City contract support is at the $4.50 200-day. Resistance is at the seven-month high at $4.74 1/2, which was printed on Thursday with the 10-day at $4.59 just above the market.

David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered adviser.
He can be reached at dfiala@futuresone.com
Follow Fiala on Twitter @davidfiala

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