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DTN Midday Grain Comments 02/21 11:04
Grains Mixed at Midday
Corn is flat to 2 cents lower at midday, soybeans are flat to 2 cents
higher, and wheat is mixed.
By David Fiala
DTN Contributing Analyst
General Comments
The U.S. stock market is weaker with the Dow down 180. The dollar index is
58 lower. Interest rate products are weaker. Energies are weaker with crude
down $0.85. Livestock trade is weaker with cattle the downside leader. Precious
metals are firmer with gold up $23.00.
CORN
Corn trade is 1 to 2 cents lower at midday with trade retreating after
touching $3.80 for the 16th-straight session. Ethanol margins are little
changed with ethanol futures remaining flat, with spring driving season and
better blender margins getting closer. Corn basis remains steady to slightly
softer, with little change in recent days but more open weather should help
movement along with March basis contracts coming due. Weekly export sales
remain strong at 1.25 million metric tons. On the March contract support is the
lower Bollinger Band and the fresh lows at $3.75, then the $3.71 4-month low,
with resistance at the $3.94 recent 2 1/2-month high with the 20-day just above
the market at $3.82 which we remain just below.
SOYBEANS
Soybean trade is flat to 2 cents higher with trade holding just below $9.00
nearby, with spread trade remaining firm and early strength fading again. Meal
is $2.00 to $3.00 lower, and oil is 35 to 45 points higher. South America
continues to make good progress with weather and harvest moving forward with
little change on the horizon with some rain delays in Brazil in recent days.
The Brazilian ral remains very cheap as well hurting U.S. export
competitiveness near term with new lows scored this week, with the dollar
finally fading a bit this a.m. New-crop soybeans will need to gain vs. corn to
provide an acreage incentive ahead of planting in the U.S. with little progress
on that front this week so far. Weekly export sales were soft with 494,300
metric tons of soybeans, 169,400 of meal, and 42,000 of oil with hints at a
third MFP if trade gains don't materialize. The March soybean chart support is
the 20-day moving average at $8.88, with resistance the upper Bollinger band at
$9.05.
WHEAT
Wheat trade is mixed with trade giving back early gains with trade still
looking to sustain buying after the early week surge. Weather threats for the
plains remain limited near term domestically with limited short-term moisture
across most of the plains and the east seeing the bulk of that, and most wheat
still dormant with the cold snap. Kansas City is at an 86-cent discount to
Chicago, regaining a dime the last few days while Minneapolis is back to a 28
cent discount as well. World values remain mostly elevated with Chicago wheat
expensive, and Kansas City wheat on the low end with Black Sea and European
origin still the better deals for Middle East tenders, and Australia mostly out
of the market at the moment. Weekly export sales were softer at 364,300 metric
tons of old crop, and 60,100 of new. The March Kansas City chart support the
20-day at $4.74 which we are testing, and resistance the upper Bollinger Band
at $4.87.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
(AG)
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