The U.S. stock market indices are mixed at midday with the Dow futures down 20 points. The interest rate products are lower. The dollar index is 37 lower. Energies are mixed with crude up 0.20. Livestock trade is higher. Precious metals are higher with gold up $20.
Corn trade is a penny higher at midday off firmer ethanol trade; corn trade has been slow with trade around 2 lower overnight to 1 1/2 higher this morning. The stock market was lower and crude lower giving weakness but momentum on these outside markets changed to mixed. The weekly EIA numbers had ethanol stocks down 2.6% with production off 3.8% on the week and gasoline demand only off 0.6%. Ethanol margins have seen pressure with firm corn values and sliding energy values but variable margins should keep grind going and the higher midday ethanol futures trade is a plus to production margins. Good current and projected livestock margins should keep feed usage high as well looking forward throughout 2018. The bull argument needs exports to kick it up a notch to prevent bears from arguing friendly items are priced-in with our strength the past month. On the March chart, support is at the 20-day at $3.59 with the 100-day at 3.57 below that, with the 200-day moving average at $3.76 the highest moving average and major resistance.
Soybean trade is steady on new crop to 4 cents higher on nearby, meal is up $1 to $2 and bean oil is up 10 points here at midday. November beans have only seen a 3 3/4 cent trading range overnight up to midday, but we have just squeaked out a new high for the move. There should be volatility moving forward with the moves to new highs for the move this week and the important weather month of February in South America. The Argentine weather picture continues to be watched. The export arena will be concerned about fresh cancellations by China after the one this week, especially if prices hold our current higher trend. On the March, support is the 10-day moving average at $9.90, with resistance the $10.27, which is the 6-month high. At midday we are above the upper Bollinger band at $10.11 1/2.
Wheat trade is mixed at midday with Minneapolis a penny higher while winter wheat contracts are down around a nickel due to some moisture relief again in the extended forecast and some noted long profit taking. The spillover support from corn and beans only appears to be limiting downside at midday. Looking at the weather I am still concerned the dry trend will remain the entrenched pattern for the plains with La Nina in the Pacific. On the March Kansas City wheat support is at the $4.55 20-day with resistance at the $4.72 200-day then the recent high at $4.84 1/2.
David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered Advisor.
He can be reached at firstname.lastname@example.org
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