DTN Midday Grain Comments 01/13 11:34
Grains Mixed at Midday
Chart buying has beans printing new highs for the move at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 40. The
interest rate products are lower. The dollar index is 11 points lower. Energies
are lower with crude down $0.40. Livestock trade is higher. Precious metals
lower with gold down $5.
Corn trade is 2 cents lower in slow trade; the higher soybean trade is
limiting downside in corn. The market is further digesting the USDA numbers
seen yesterday and sideways trade has been the result. The reports did not
change much for the corn market picture; most believe sideways action is likely
the rest of the month. The USDA January USDA World Agricultural Supply and
Demand Estimates ("WASDE") delivered a lower than expected carryover at 2.355
billion bushels versus 2.396 billion bushels expected. This is still the
largest carryover in modern history. A yield reduction from 175.3 to 174.6
bushels per acre was the main item of change yesterday. The poor ethanol
margins should limit upside in corn near term. On the March corn chart support
is at the $3.51 100-day moving average with resistance at the $3.62 3/4 January
high. The trading range through midday has only been 4 cents, so unless
soybeans give some bigger spillover direction most traders think corn will be
quiet this afternoon.
Soybean trade is 4 to 7 higher at midday and near the daily highs; meal is
up $7 which is giving beans the most support due to short covering. Soybean oil
is down 30 points. The soybean market received some friendly news versus
expectations from the USDA and now have positive chart items to finish our the
week. The quick 50 cent run up from our one-week lows have many margin calls
generated on short positions. The USDA yield reduction to 52.1 bushels per acre
versus 52.5 on the last USDA report lead to a friendly carryover number on the
WASDE down to 420 million bushels versus 468 million expected. The global
carryover was at 82.3 million metric tons versus 82.5 expected. Some weather
uncertainty due to too much moisture in Argentina is letting futures run up
here at midday ahead of the long holiday weekend. On the March soybean chart
support is at the 20-day and highest major moving average at $10.17, with
nearby resistance at the $10.50 upper Bollinger Band which we are testing at
Wheat trade is mixed with Chicago down 2 cents, Kansas City up 2 cents and
Minneapolis a nickel higher at midday. Fridays are trend days so trend buying
and spillover support from beans is noted supporting wheat at midday. The USDA
numbers were mixed yesterday with friendly winter wheat plantings but bigger
carryover estimates. Meaning even with some lower planted acres, heavy
historical supplies will remain. Some major world production areas need to have
weather hurt production to change our heavy supply side fundamental picture for
wheat. March Kansas City support is at the $4.29 100-day moving average,
resistance is at the $4.60 200-day moving average.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at email@example.com
Follow Fiala on Twitter @davidfiala
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