DTN Midday Grain Comments 01/24 11:02
Soybeans Lower, Wheat Higher, Corn Mixed at Midday
Corn futures are narrowly mixed at midday Monday; soybean futures are 18 to
20 cents lower; wheat futures are 8 to 20 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 700 points. The U.S.
Dollar Index is 35 points higher. Interest rate products are firmer. Energies
are weaker with crude down 2.40. Livestock trade is mixed with hogs leading.
Precious metals are mixed with gold up 2.00.
Corn futures are narrowly mixed at midday with two-sided trade so far as
spread action remains firm. Rains looks better for South America and
Russia/Ukraine tensions continue to support corn and wheat. Ethanol margins
will continue to be squeezed by tepid short-term demand with trade expecting
another stocks build this week. Trade will continue to look for further sales
confirmation on the daily wire with another 150,000 metric tons (mt) reported
Monday; export inspections holding up well at 1.116 million metric tons (mmt).
Basis should remain rangebound to slightly weaker in the short term with
weather likely to slow short-term movement. Traders will continue watching
South American weather as we head towards second-crop planting and development.
On the March contract we have support at the 20-day moving average at $6.03;
the fresh high at 6.19 1/2 as resistance.
Soybean futures are 18 to 20 cents lower at midday with early gains giving
way to weaker action, albeit with firmer spread trade. There were more rains
over the weekend and in the short-term forecast for South America, along with
early harvest progress. Meal is $2.00 to $3.00 lower and oil is 115 to 125
points lower. Basis remains mostly flat in the short term with some processors
starting to widen. Crush margins remain solid with future renewable diesel
demand likely to keep good support under oil going forward, while meal has
struggled with the $400 level in recent days. Early harvest is under way in
South America, likely to further crimp U.S. export competitiveness in February.
Weekly export inspections held up OK at 1.298 mmt and 132,000 mt hit the daily
wire as heading to China. On the March soybean chart, we have resistance at the
fresh high at $14.29 1/2, with trade back above the 20-day moving average at
$13.82 as support.
Wheat futures are 8 to 20 cents higher at midday with trade gaining strength
on Black Sea political concerns. Continued consolidation around $7.90 to $8.00
for the winter wheat and solidly above $9.00 for spring wheat. The dollar
remains squarely rangebound in the short term as well, but is pressing back
towards the upper end this morning. Plains weather looks drier with a little
snow cover out of the last system, while temps continue to fluctuate, keeping
stress intact with other Northern Hemisphere weather concerns fading for the
moment while political fears ramp up again with little change in the
Russia/Ukraine situation besides U.S. recalling diplomats. Export inspections
improved a little at 400,973 mt. Spring wheat is weaker versus Chicago,
dropping the premium to $1.50 on the March, with KC at a 18-cent premium in
firmer action. KC March chart support is the 20-day moving average at $7.92,
which we are above overnight, with resistance the recent high at $8.14 1/2.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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