DTN Midday Grain Comments

General Comments

The U.S. stock market indices are softer with the Dow futures down 100. The interest rate products are weaker. The dollar index is 30 lower. Energies are weaker with crude down $1.20. Livestock trade is sharply lower. Precious metals are mixed with gold up $5.10.

CORN

Corn trade is a penny lower in quiet midday trade with the March board just below the recent highs. Corn basis looks to be flat with better weather improving movement potential ahead of the likely year end slowdown. Ethanol margins remain poor with energies remaining at the lower end of the range and ethanol futures remaining flat with corn firmer generally over the past month. Trade will be watching the daily wire for more sales. The weekly export inspections were a little disappointing at 885,060 metric tons. On the March chart the 20-, 50-, and 100-day moving averages at $3.78-$3.80 is our chart support area with resistance at $3.87 3/4 then the 4-month high at $3.90 1/2.

SOYBEANS

Soybean trade is 4 to 7 cents higher at midday with the expectation of more confirmation of China business, and dry weather in parts of Brazil. Meal is $1.50 to $2.50 higher and oil is 15 to 25 points lower. South America is focused on the dry pockets in Brazil along with quicker progress in Argentina. Basis will provide signals on the quantity of nearby cash business getting done with flat to slightly firmer trade this last week. The daily wire was quiet today. Big picture, U.S. origin is the economic choice for China in the three-month horizon, but once the bulk of the 2019 Argentine and Brazilian crop is harvested that likely will not be the case. The weekly export inspections were in line with expectations at 974,876 metric tons. January support is the 20-day at $8.97, with the 10-day at $9.11 nearby resistance then the recent high at $9.29.

WHEAT

Wheat trade was 2 to 6 cents higher at midday with trade still working to consolidate the recent move higher. The dollar has drifted lower to start the week, but remains elevated. Australian harvest will continue in the near term. North American winter wheat is seeing milder weather, helping late emergence. Russian/Ukrainian tensions will continue to draw attention, especially if Russian exports continue to slow. Weekly export inspections were good at 682,162 metric tons. On the March Kansas City chart, support is at the 50-day of $5.18 that we closed above last week and today with the upper Bollinger Band at $5.21, which we are testing overnight and the 100-day the next round up at $5.44.

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 him on Twitter @davidfiala

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