DTN Midday Grain Comments 10/20 11:25
Grains Trending Lower at Midday
Grain trade is lower at midday after early strength fades; midday momentum
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow 40 points lower. The
interest rate products are mixed. The dollar index is 36 points higher.
Energies are lower with crude up 1.10. Livestock trade is firm with cattle
sharply higher. Precious metals are lower with gold up $2.40.
Corn trade is 5 to 6 cents lower at midday after trading to a new high for
the move up to $3.59 1/4 on the December contract. The bounce from our contract
low, printed at the end of August, has been 45 cents, but we are 7 cents off
the high here at midday. Ethanol margins are stable with ethanol futures near
flat as corn declines and crude declines. Open weather should mean rapid
harvest progress in the week ahead; this will lead to localized basis pressure
especially in the western corn belt. The weekly export sales were strong at
1.02 million metric tons. On the December contract chart support is at $3.50
area with the 10-day at $3.49 below there. Resistance is at the $3.59 1/4
three-month high printed today than the $3.63 100-day followed by the 200-day
Soybean trade is 4 to 6 cents lower at midday, so we have some reversal type
action going on following the new high for the move early on. Pressure is noted
due to harvest and continued good yield reports. Meal is $2 to $3 lower and oil
is 35 to 45 points lower. Good harvest weather in the week ahead is expected
domestically. Basis should widen this week. Brazilian weather has improved this
week as well. Both have cooled off the firmer chart move this week. The weekly
export sales were strong at 2.01 million metric tons of soybeans, 398,000 of
meal, and 300 of oil. The good sales have limited downside. On the November
soybean chart, support is the $9.70 50-day, then the $9.59 20-day. Resistance
is at the $9.89 3/4 high reached today then $10, then the 100-day up at $10.25.
Wheat trade is fractionally to 4 cents lower at midday with pressure from
the weaker row crop trade and strong dollar weighing. The weekly export sales
were okay at 513,800 metric tons. The dollar remains at the upper end of the
range, with Russia still the cheapest origin for the key importing nations.
Egypt has announced plans to build a bigger stockpile of consumer staples,
which should help to find more demand near term. Weather concerns may build
with the reduced acreage in the U.S., and dry weather at emergence for a chunk
of the western belt but the extended forecast offers some hope. On the Kansas
City December chart support is the 50-day at $4.19 then the 20-day at $4.13.
Resistance is at the $4.29 upper Bollinger Band then the August $4.49 3/4 high.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Advisor.
He can be reached at email@example.com
Follow Fiala on Twitter @davidfiala
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