DTN Midday Grain Comments 01/16 11:05
All Grains Lower at Midday
The U.S. stock market is firmer with the Dow up 170. The dollar index is 15
points lower. Interest rate products are weaker. Energies are weaker with crude
down $0.50. Livestock trade is mixed with hogs leading. Precious metals are
mixed with gold $6.50 higher.
By David Fiala
DTN Contributing Analyst
Corn trade is 8 to 9 cents lower at midday with trade falling back to the
lower end of the recent range with broad selling in ags starting overnight.
Ethanol margins remain tight, with futures back at the lows with the large
stocks build, and imports yesterday, with the potential of fresh export
business as part of the trade deal needed soon to give a boost ahead of driving
season. US weather looks to be more active to the east in the U.S., allowing
for more movement west for now, while South America looks to make short term
progress. Basis has remained sideways. Weekly export sales showed some
improvement to 784,400 metric tons of old crop, and 207,000 of new. On the
March contract support is $3.77 recent low, with the lower Bollinger Band at
$3.83 now resistance.
Soybeans trade is 4 to 6 cents lower at midday with trade firmly in show me
mode post trade deal as we filled the first December gap area at $9.27
overnight. Meal is flat to $1.00 higher, and oil is 25 to 35 points lower. We
did see 180,000 of meal and cake sold to Philippines. The Brazilian real
remains very cheap as well. American weather remains within the recent pattern
for soybeans as well. Basis has remained firm at processors with the strong
crush margins. Weekly export sales were a mixed bag at 711,500 metric tons,
36,200 of oil, and 375,200 of meal. The March chart support is at the December
gap at $9.15 after trade fell below the $9.27 gap overnight.
Wheat trade is 4 to 11 cents lower with widespread selling this morning as
trade pulls back from the fresh highs yesterday with overbought conditions with
Minneapolis holding up the best. Cold threats remain limited for the plains
with most of the moisture staying to the east, with western snow cover
remaining limited, while Russia has been warmer and drier than usual along with
usual Russian governmental action today. Spread action is steady to a little
wider, putting Kansas City at a 80 cent discount to Chicago, while Minneapolis
is back to a 14 cent discount. Weekly export sales improved to 650,600 metric
tons of old crop, and 59,700 of new. The March Kansas City chart support is the
20-day moving average at $4.78, with resistance the upper Bollinger Band at
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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