DTN Midday Grain Comments 03/03 11:15
Grains Mixed at Midday
Mixed midday trade for grains illustrates that sideways action may continue
well into March.
By David Fiala
DTN Contributing Analyst
U.S. stock market indices are lower at midday with Dow futures down 110
points. Interest rate products are higher. The dollar index is 20 lower.
Energies are higher with crude up $.40. Livestock trade is lower. Precious
metals are lower with gold down $6.
Corn futures are a penny higher at midday; the range has been equally mixed
trading from around 3 lower to 3 higher. A May contract move above $3.96 or
below $3.85 (Friday's range) may see some chart follow-though; this would be
due to the inside day Monday. Trade the past 6 weeks has hinted more toward
slower sideways action this month; and that appears to be what is going on
Tuesday. Ethanol margins remain strong for blenders with the unleaded gasoline
premium to ethanol increasing, but producer margins remain tight. Ethanol
futures are higher for the third day, so this is showing a little more support
for producer margins. The May futures' late January low of $3.73 3/4 is key
long-term support with resistance at the $3.99-$4.03 area where we find the
50-day and 200-day moving averages. The 10-day, 20-day, and 100-day moving
averages are all clustered around $3.90, and the market has chopped on both
sides of this level as of midday. A lower close could always trigger some long
fund liquidation or fresh chart selling following the $3.88 close on Monday.
Soybean futures are 5 to 8 cents lower at midday with meal $4 to $5 lower
and oil 10 to 20 points higher. The market rejection of the higher move Sunday
night illustrates selling interest around our recent highs. The trucker strike
in Brazil looks to be waning, which should limit interest in buying interest
from the U.S. on delay potential. On the May soybean chart resistance is at the
$10.13 10-day; the $9.98 20-day level is support. The 200-day up at $10.68 and
would be a more major chart resistance level. The trade has tested the $10.00
level but we appear to have found support like we did last week.
Wheat futures are 3 to 6 higher at midday and appear to have some light
upside momentum in play across the three contracts. Selling interest was light
around the contract lows so trade is bouncing off those levels to our midday
strength may be short profit-taking. The dollar has remained near the higher
end of the range/multi-year highs keeping real export interest lighter than our
prices in dollar terms may illustrate. The shift into spring will bring further
debate about crop conditions in the U.S. and the Black Sea areas. On the May KC
chart the market is below all major moving averages with the $5.37 10-day
David Fiala is a DTN contributing analyst and the president of FuturesOne
and a registered Trading Adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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