DTN Midday Grain Comments 10/23 11:04
Flat to Lower Trade at Midday
Corn is 1 cent to 2 cents lower; soybeans are 1 cent to 2 cents lower, and
wheat is flat to 2 cents higher.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 55. The U.S. dollar index is
5 points higher. Interest rate products are weaker. Energies are firmer with
crude up $0.70. Livestock trade is mixed. Precious metals are firmer with gold
Corn trade is 1 cent to 2 cents lower at midday with trade fading into
support levels with harvest pressure and little fresh news. Harvest will expand
with in some areas but will remain off the pace overall. The weekly ethanol
report showed further rebounds in production to 996,000 barrels per day (bpd),
up 25,000 bpd, with stocks down 697,000 barrels. Basis remains flat to weaker
with anticipation of more inbound bushels soon with pockets of localized
strength. South America looks to remain in the same weather pattern for now as
planting continues. On the December contract support is at the 20-day moving
average at $3.88, which we are just below at midday; with the 50-day at $3.76
the next level of support. Chart resistance is at the 10-day at $3.91.
Soybeans are 1 cent to 3 cents lower at midday with trade moving back to the
lower end of the range with harvest pressure and little fresh news otherwise,
with 128,000 metric tons (mt) of exports to unknown hitting the daily wire.
Meal is flat to $1.00 higher and oil is 10 cents to 20 cents lower. Crush
margins remain solidly bullish, along with trade backing off overbought
conditions. The real has firmed but remains rangebound. Bean basis should see
pressure as combines continue to roll. South America should make more progress
this week and into the second half of the month with some weather issues
remaining and planting pace solidly behind. On the November chart, support is
at the 10-day at $9.33, which we are testing at midday with the upper Bollinger
band at $9.50 as resistance.
Wheat trade is mixed in quiet midday trade with little fresh news to move
the market and Chicago holding the contract highs. The Chicago/Kansas City
December spread is 99 cents with trade hitting new highs again after early
choppy trade. The corn/HRW spread has narrowed back to 34 cents, with wheat
still on the edge of rations. Export action continues to be dominated by Black
Sea origin, but their prices have firmed while Australia remains dry. The
December KC chart support is at the 20-day at $4.15 with the 10-day at $4.22;
the next level up, with the upper Bollinger band right at $4.34.
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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