DTN Midday Grain Comments 01/28 11:29
Wheat Leads Grains Lower at Midday
Row crops are slightly lower, while wheat selling accelerates.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed at midday with the Dow futures up 30
points. The interest rate products are lower. The dollar index is 23 higher.
Energies are mostly lower with crude down 1.00. Livestock trade is mostly
higher. Precious metals are mixed with gold down $5.
Corn trade is 1 to 3 cents lower in quiet trade at midday. The weekly
ethanol production report showed production down 0.1%, and stocks were 1.2%
higher while gasoline demand was up 1.93%. Blender margins will remain under
pressure until we get closer to spring unleaded blend. Trade will be watching
for signs of further export business after improved sales and shipments in the
past few days. The warmer weather in the plains should limit feed demand in the
near term. March chart resistance is at $3.91, the 20-day moving average with
support at the $3.77 100-day moving average.
Soybean trade is 2 to 4 cents lower at midday in light trade, with meal $2
to $3 higher and oil 100 to 110 points lower. South American weather forecasts
remain mostly good with most of the concerns concentrated in Northern Brazil.
Some of the local crop forecasters have begun to scale back crop-size
projections slightly, but overall expectations remain very large. Soymeal
continues to maintain an inverse with good demand for the front month, and
overall meal is the main leader of the complex. The March soybean chart
resistance is the 10-day moving average at $9.83, with a new low for the move
put in this morning at $9.66. Major support is at $9.20 which is our contract
low printed in early October.
Wheat trade is 9 to 12 cents lower at midday with continued selling pressure
tied to the slow pace of export sales and the persistent strength of the
dollar. Trade is oversold with new lows made again this morning. Warmer weather
across the Southern Plains will limit wheat stress but could encourage some
wheat to leave dormancy early, with dryness concerns starting to build a across
the plains as well. The March Kansas City 10-day and lowest major moving
average, at $5.69, serves as nearby chart resistance with limited support
because we slipped to a new contract low, not just low for the move. This could
lead to long liquidation late today if we cannot generate a late-day bounce.
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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