DTN Midday Grain Comments 02/11 11:44
All Grains Lower at Midday
Dollar weakness and short profit taking have grain trade higher at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indexes are lower with the Dow futures down 310
points. The interest rate products are higher due to the talk of negative rates
yesterday. The dollar index is 60 points lower and at the lowest level since
October 22. Energies are mixed with crude down 50 cents and unleaded up a
penny. Livestock trade is mixed with cattle lower and hogs higher. Precious
metals are sharply higher with gold up $60.
Corn trade is 2 higher at midday; we did drop down to a new low for the move
by less than a penny and then bounced a nickel. The weekly export sales were
not supportive coming in below expectations at 405,000 metric tons but some
fresh business today has been talked about. The weekly EIA number yesterday
listed ethanol stocks 2.66% higher, production 1.04% higher and gas demand up
9%, this pressured ethanol. The USDA estimate shows ethanol usages strong and
growing, but deteriorating margins has a little bit of that usage at risk. On
the March chart the $3.67 area is resistance where we find the 10-, 20-, and
50-day moving averages. Support is at the $3.59 1/4 low printed yesterday and
this morning then the $3.48 1/2 contract low.
Soybean trade is up a dime at midday with some upside momentum; meal is up
$3 and bean oil is up 50 points. The trading range for beans was only 3 cents
overnight, but after failing to fall further since the USDA report, shorts
turned to cover, and end users like the lower prices, plus the dollar is
favorable for export business which has been rumored this morning. The weekly
export sales numbers were near the high side of expectations at 667k tons, meal
at 189k tons and bean oil at 3.8k tons. On the March soybean chart the double
digit midday gains only brings us back to a few cents from nearby resistance at
the $8.75 1/2 20-day, with the 100-day at $8.81 our resistance level above
there. Support is at the $8.59 1/2 weekly low then the $8.52 early January low.
Wheat trade is 1 to 3 cents higher at midday in slow trade; wheat is a
nickel off its daily highs. The weekly export sales did not support the bulls
coming in at only 263k tons. The USDA numbers were negative on Tuesday but with
Kansas City reaching new contract lows before and after the report, the selling
dried up and we bounced the past few days. Our midday market looks like that
momentum has stalled. Wheat will need some friendly news to get more than a
bounce this month. On the March Kansas City chart, the previous low at $4.51
3/4 is chart resistance then the 10-day at $4.58. The high this morning is
$4.51 1/2. The new contract low printed Tuesday at $4.42 1/4 is chart support.
contributing analyst and the president of FuturesOne and a registered
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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