DTN Midday Grain Comments 03/22 11:31
Grains Mixed at Midday
Mixed trade at midday as early strength fades.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow 330 points lower. The
interest rate products are weaker. The dollar index is 20 points higher.
Energies are weaker, with crude 1.40 lower. Livestock trade has turned lower.
Precious metals are mixed with gold up 4.00.
Corn trade is flat to 2 cents higher at midday with trade working into the
next level of resistance overnight before fading on the day session. Midwest
weather issues are hindering demand and movement, which will continue for a bit
with a wet start to April expected for much of the belt. South America crop
progress should remain uneventful for now. Ethanol margins have improved this
week, but remain tight with the rally in the energy complex slowing its rally,
but ethanol futures remain slightly higher this a.m. Corn basis will be mixed
depending greatly on local conditions. The slow start to fieldwork will
continue to be watched in the near term with fertilizer logistics likely to be
a major issue. The USDA announced 300,000 metric tons of Corn sold to China. On
the May chart support is the 20-day at $3.71 5/8, with the 50-day at $3.79 5/8
as resistance, which we are tested before fading.
Soybean trade is 5 to 6 cents lower with trade remaining firmly range bound
between $9.00 and $9.10 and two-sided trade continuing. Meal is flat to $1.00
lower, and oil is 30 to 40 points lower. Trade news has been quieter this week
with no major reports. South America weather should maintain the recent pattern
in the coming days with Brazil harvest moving along and normal progress in
Argentina. Crush margins remain strong overall with meal still hanging near
$310 a ton with support coming back into the market at midweek. Forward demand
remains a concern with the hog losses to swine fever. On the May chart support
is the $9.01 3/8 10-day moving average, with the 20-day at $9.07 the next level
up, which we failed to hold this morning, with the 100-day at $9.17 the next
Wheat trade is flat to 3 cents higher with trade working slightly higher
after the stronger midweek action and profit taking heading towards the
weekend. Trade is still focused on easing oversold conditions with the large
fund short remaining in place with planting season coming up for spring wheat,
and weather likely to remain challenging. Export news has been quieter lately
with most of the focus on high-protein wheat. Warm plains weather will pull the
crop out of dormancy with generally good conditions so far. Wheat basis varies
widely on product and location. On the May Kansas City chart support is the
20-day at $4.40 that we closed above midweek with the 10-day at $4.39 below
that, with the upper Bollinger Band the next round up at $4.55.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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