DTN Midday Grain Comments 02/22 11:40
Grains Trending Higher at Midday
Trade is flat to slightly higher across the board at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher at midday with the Dow futures up
290 points. The interest rate products are lower. The dollar index is 15 lower.
Energies are higher with crude up 0.90. Livestock trade is mixed. Precious
metals are mixed with gold down $1.30.
Corn trade is fractionally to 1 cent higher at midday with trade continuing
to grind along at the upper end of the range and hold the higher chart trend.
The weekly ethanol report showed production up sharply at 5.12%, stocks were
0.58% lower, and gasoline demand was down .6%, with ethanol futures flat post
report. U.S. export values should remain pretty competitive at current US
offer, with 130,000 metric tons sold to unknown today with the weekly sales
report delayed until Friday. Double-crop areas in Brazil look to build some
moisture in the coming days, but that is slowing planting progress. The USDA
outlook forum pegged corn acres at 90 million. On the March chart, support is
at the 10-day at $3.66 with the 20-day at 3.63 below that, with the 200-day
moving average at $3.76 the highest moving average and major resistance.
Soybean trade is flat to 3 cents higher at midday with trade stalling again
at the upper end of the range in quiet action, with trade shaking off early
weakness. Meal is narrowly mixed and oil is flat to 10 points lower. The
weather pattern looks to keep Argentina dry, and Brazil wet in the near term
which is limiting downside, with podfill season fast approaching for Argentina,
with the Rosario Grain exchange lowering production estimates again to 46.5
million metric tons, with USDA at 54 million metric tons on the February
report. Volatility should continue here in the near term with overbought
conditions persisting in the near term. Early Brazilian harvest will continue
despite being slowed by rains, causing some crop losses. The USDA outlook forum
put soybean acres at 90 million metric tons. An export sale of 110,000 metric
tons was announced to unknown. On the March, support is the 10-day moving
average at $10.14, with resistance the $10.39, which is the six-month high
Wheat trade is flat to 3 cents higher at midday with trade staying mostly
range bound with moisture catching some parts of the Northern Plains overnight.
The extended forecast continues to be short on moisture for the SW Plains. The
dollar is higher again today, but remains below 90 on the index. The Russian
crop will continue to be watched with less cover than usual, with Black Sea
values continuing to edge higher with export offers in the $206 a ton range for
the most part. The outlook forum put wheat acres at 46.5 million metric tons.
On the March Kansas City wheat support is at the 20-day at $4.65 which we
tested overnight with resistance the 200-day at $4.71 that we slipped below
earlier in the week.
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
Follow him on Twitter @davidfiala
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