DTN Midday Grain Comments 02/19 11:02
Wheat, Corn Lower at Midday
Corn is 2 to 3 cents lower at midday, soybeans are narrowly mixed, and wheat
is 6 to 9 cents lower.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 150. The dollar index is 20
higher. Interest rate products are mostly higher. Energies are firmer with
crude up $1.20. Livestock trade is mostly higher with hogs leading. Precious
metals are mixed with gold up $4.00.
Corn trade is 2 to 3 cents lower at midday with trade continuing the recent
pattern of higher and lower action as we traded $3.80 for the 14th-straight
session. Ethanol margins are little changed with ethanol futures flat to start
the week, with spring driving season and better blender margins getting closer
and the weekly report delayed until Thursday. Corn basis remains steady to
slightly softer, with little change in recent days but more open weather should
help movement along with March basis contracts coming due. On the March
contract support is the lower Bollinger Band and the fresh lows at $3.75, then
the $3.71 4-month low, with resistance at the $3.94 recent 2 1/2 month high
with the 20-day just above the market at $3.83 which we remain just below.
Soybean trade was narrowly mixed with trade pulling back from the recent
string of firmer days with fresh export business still lacking short term but
spreads firming. Meal is flat to $1.00 higher, and oil is 30 to 40 points
lower. South America continues to make good progress with weather and harvest
moving forward with little change on the horizon with some rain delays in
Brazil in recent days. The Brazilian real remains very cheap as well, hurting
U.S. export competitiveness near term. New-crop soybeans will need to gain vs.
corn to provide an acreage incentive ahead of planting in the U.S. with little
progress on that front this week. The March soybean chart resistance is the
20-day moving average at $8.90, with support the lower Bollinger band at $8.68.
Wheat trade is 7 to 10 cents lower with trade giving back some of the big
gains seen on Tuesday with trade needing to consolidate gains Wednesday.
Weather threats for the Plains remain limited near term domestically with
limited short-term moisture across most of the Plains and the east seeing the
bulk of that. Kansas City is at an 83-cent discount to Chicago, regaining a
dime the last few days while Minneapolis is back to a 19-cent discount as well.
World values remain mostly elevated with Chicago wheat expensive, and KC wheat
on the low end with Black Sea and European origin still the better deals for
Middle East tenders. The March Kansas City chart support the 20-day at $4.74,
and resistance the upper Bollinger Band at $4.93.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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