DTN Midday Grain Comments

General Comments

The U.S. stock market indices are lower with the Dow futures down 65 points. The interest rate products are higher. The dollar index is steady. Energies are lower with crude down 0.40. Livestock trade is mostly lower. Precious metals are higher with gold up $2.

CORN

Corn trade is 2 cents lower at midday which has us at the low of a very slow 3 cent trading range so far. Outside markets are providing limited direction, the trend of the week is down, so we may be starting to see some long liquidation here at midday. The USDA Agricultural Outlook Forum this week has provided limited meaningful news, rather confirming our comfortable supply situation is expected to remain in the year ahead. Granted weather could always change that, but the demand side of the equation remains good. This should limit downside around the low side of the trading range. Conference sessions today discussed the large and growing livestock population that will continue to keep demand for corn strong. On the May corn chart support is at the $3.69 50-day, then the $3.64 100-day. Resistance is at the $3.76 20-day, then the $3.79 10-day moving averages.

SOYBEANS

Soybean trade is mixed at midday with new crop November a penny lower and nearly March and May contracts up fractionally. Meal is near $1.70 a ton lower and soybean oil is up 22 points. Soybeans tried to rally, were up around a nickel, but have faded at midday. The weekly trend is lower with futures moving to a one-month low, but we are holding at lower support levels. The trading range has only been 7-8 cents but if we get below support this slow day could turn active this afternoon. Demand news remains good, supply news remains negative with a big South American crop coming in that may provide late-day harvest pressure. The May 200-day and lowest major moving average is at $10.20; this is viewed as key support then the $10.01 3-month low. Resistance is at the $10.43 50-day.

WHEAT

Wheat trade is 1 to 6 cents lower across the three markets with light spillover pressure from corn at midday. The moisture in the winter wheat areas has been welcome and noted for our lower midday trade. The weekly sales number yesterday was under a half million tons which is not getting much attention. The large domestic and world carryover stocks were a highlight of the wheat news this week along with stressed farm incomes. The May Kansas City wheat has support at the $4.61 200-day moving average and resistance at the $4.73 10-day then the $4.87 seven-month high printed one week ago.

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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