DTN Midday Grain Comments

Soybeans Lead Grains Lower At Midday

David M Fiala
By  David Fiala , DTN Contributing Analyst
(DTN photo by Nick Scalise)

General Comments

The U.S. stock market indices are mixed with the Dow 40 points lower. The interest rate products are firmer. The dollar index is 40 points higher. Energies are weaker with crude down $0.98. Livestock trade is mixed with feeder cattle leading. Precious metals are weaker with gold down $6.20.

CORN

Corn trade is 2 cents lower at midday scoring a new one-month low in quiet trade but we are off the low at midday. On the USDA numbers on Friday the yield was 2.5 BPA lower to 176.4, production was 194 million lower to 14.430 billion bushels, which was supportive. The carryout was 46 million lower at 1.735 billion which was neutral. World stocks were 309.78, a million metric tons higher than last month which was negative. Brazil corn production was left unchanged at 94.5 million metric tons, while Argentina was raised 3.5 million metric tons to 46.0 metric tons. The second crop in Brazil is being planted in good condition for now with planting heading towards the halfway point. Ethanol margins remain poor with futures finding some strength to start the week, getting back over $1.31. Corn basis has remained flat to weaker with improved movement and more open weather. The weekly export inspections were disappointing at 743,563 metric tons. On the March chart support is the $3.72 lower Bollinger Band and the fresh low at $3.71 3/4. Resistance is at the $3.77-$3.78 cluster of major moving averages again.

SOYBEANS

Soybean trade is 9 to 11 cents lower at midday with early two-sided trade giving way to selling with no concrete trade progress so far. Meal is $1 to $2 lower and oil is 60 to 70 points lower. South America weather looks to continue to drift towards improvement in Brazil and Argentina with harvest continuing to move in Brazil and pod fill starting in Argentina. Crush margins remain strong overall, with basis likely to turn steadier on weather and the futures pull back. On the report, yield was half a bushel lower to 51.6 BPA, production was 56 million lower to 4.544 billion, with carryout down 45 million to 910 million bushels, and stocks at 3.736 billion, 7 million below expectations. Brazil production was lowered 5 million metric tons to 117, while Argentina was down 500,000 to 55.0 million with world stocks at 106.72 million metric tons, down 8.6 million from last month. Trade talks will resume in China with the main US negotiators going over. Weekly export inspections were as expected at 1.06 3 million metric tons. On the March chart resistance is now the 50-day at $9.13, and support the 100-day at $9.00.

WHEAT

Wheat trade is mixed at midday with the higher protein wheats holding up the best with trade seeing oversold conditions again and spread trade still very active with Minneapolis leading overall, and KC spreads gaining on the front months. Egypt secured two cargos of U.S. SRW in a bit of a surprise last week, splitting with Eastern European origin as Russian prices remain elevated, with 128,000 of HRW to Nigeria as well. The dollar rally has resumed to start the week, with the longest streak since 2017 ongoing. Southern Hemisphere harvest will continue in the near term. North American winter wheat areas will remain cold this week. On the report, wheat acres were 31.29 million, 900,000 below expectations, with stocks at 1.991 billion bushels, and carryout at 1.01 billion, both just above expectations, providing something for everyone. World stocks were 267.53 million metric tons, down 500,000 metric tons. Weekly export inspections were good at 562,307 metric tons. On the March KC chart support is low at $4.87 1/2 with resistance the 10,20, and 50-day moving averages clustered at $5.05.

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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David Fiala