DTN Midday Grain Comments 10/27 11:20
All Grains Higher at Midday
Trade is higher across the board at midday, weekly sales were good.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow 5 points higher. The
interest rate products are higher. The dollar index is 12 points higher.
Energies are higher with crude up 0.60. Livestock trade is higher. Precious
metals are mixed with gold up $0.50.
Corn trade is 2 to 3 cents higher at midday due to spillover support from
beans, demand optimism and light chart buying. Ethanol production margins
remain good; blender margins need improvement coming forward to absorb the
strong production. Corn basis is still seeing some pressure in many areas as
country elevators continue to fill up. The weekly export sales were okay at
799,300 metric tons. There was a daily sale of 204,000 metric tons of sorghum
was announced as sold to China. 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 three-month high then the $3.61 100-day. We
have come within a penny of the high. 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
Soybean trade is 5 to 7 cents higher at midday with two-sided trade morning
after setting new highs for the move overnight. Meal is $7 to $8 higher and
bean oil is 35 to 45 points lower. Demand remains strong which should underpin
trade with the USDA announcing 396,000 metric tons of soybeans sold to China,
and 129,000 metric tons sold to unknown. The weekly export sales were strong
again at 2.05 million metric tons, with 146,200 of meal, and 24,500 of oil.
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. On the November
soybean chart support is at the 200-day at $9.80, then the 20-day and 50-day
$9.68-73. Resistance is the 100-day up at $10.23 after the strong finish
Wheat trade is 1 to 4 cents higher across the three markets at midday due to
spillover support from the row crops along with renewed light chart buying. The
dollar remains near multi-month highs with light weakness overnight 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 much of the west, with
forecast shifting a bit drier the last couple of days. The weekly export sales
were better at 646,100 metric tons of old crop, and 26.300 of new crop
(2017/18). On the Kansas City December chart support is at the 20-day at $4.13,
with $3.97 below there. The two-month high at $4.28 1/4 is key resistance.
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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