DTN Midday Grain Comments 10/28 11:12
Grains Lower at Midday
Trade is lower at midday, led by wheat.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow 60 points higher. The
interest rate products are lower. The dollar index is 12 points lower. Energies
are mixed with crude down 0.20. Livestock trade is higher. Precious metals are
mixed with gold down $1.10.
Corn is flat to 2 cents lower in quiet trade at midday with trade looking to
hold the higher end of the range into the weekend to provide another positive
close. Ethanol production margins remain good; blender margins need improvement
coming forward to absorb the strong production with crude sliding back below
$50 a barrel. Corn basis is still seeing some pressure in many areas as country
elevators continue to fill up as harvest begins to wind down. The spread trade
has been slightly firmer this morning indicating that nearby demand remains
strong. On the December contract support is at the $3.47 20-day then the 50-day
at $3.38 which is the lowest major moving average. Resistance is up at the
$3.59 1/4 3-month high then the $3.61 100-day. We have come within a penny of
the high this week. Expect buy stops above there, and if we slip back below
$3.50 over the next few days the trade may be talking about a double top.
Soybean trade is narrowly mixed overnight with trade looking to consolidate
further in the upper end of the range going into the weekend. Meal is $2 to $3
lower and bean oil is 40 to 50 points lower. Harvest pressure is limiting
upside but should fade as we hit the homestretch for soybeans with basis
pressure increasing as harvest gets ahead of train capacity in some areas due
to the continued larger-than-expected yield reports. Brazilian weather has
improved for good planting progresses and early crop development, but
forecasters have mixed ideas moving forward with the extended forecast moving
drier. On the November soybean chart support is at the 10-day at $9.91, then
the 200-day at $9.81. Resistance is the 100-day up at $10.23 after the
continued positive finishes.
Wheat trade is 1 to 6 cents lower across the three contracts at midday with
trade continuing to struggle to hold strength with supplies weighing on the
market and a lack of positive spillover trade from the row crops this morning.
The dollar remains near multi-month highs with light weakness at midday as
trade looks to back away from the upper end of the range. Weather concerns may
build with the reduced acreage in the U.S., and dry weather in many of the
winter wheat areas so far. On the Kansas City December chart support is at the
20-day at $4.13, with $3.97 below there. The 2 month high at $4.28 1/4 is key
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
Copyright 2016 DTN/The Progressive Farmer. All rights reserved.
Get your local Cash Bids emailed to you each morning from DTN – click here
to sign up for DTN Snapshot.