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DTN Midday Grain Comments     02/05 11:34

   All Grains Lower at Midday

   Grain trade is seeing light losses at midday with outside market weakness.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are lower with the DOW futures down 170 
points. The interest rate products are flat to lower. The dollar index is 70 
points higher. Energies are lower with crude down 20 cents. Livestock trade is 
mostly lower. Precious metals are lower with gold down $3.


   Corn trade is 2 cents lower in slow midday with futures sitting near the 
daily lows which are our weekly lows. The dollar is back up some and the stock 
market is weak. It appears money is moving out of the US and Europe with global 
economic concerns growing but nothing major appears to be going on at this 
juncture. The dollar action will be watched closely next week. The USDA monthly 
World Agricultural Supply and Demand Estimates ("WASDE") are due out on 
Tuesday. The average trade guess is for the domestic corn carryover to come in 
at 1.810 billion bushels versus 1.802 on the January report. World ending 
stocks are expected to be at 208.3 versus 208.94 on the January report. So very 
little change is expected on Tuesday, this sets us up for some reaction with 
even a small 25-50 million bushel surprise would be seen.  On the March chart 
we slipped below the $3.67 50-day moving average with the 20-day at $3.65 3/4 
nearby support which is also the lowest major moving average. Resistance is at 
the $3.73 3/4 high printed Tuesday then the 100-day up at $3.79 1/2. 


   Soybean trade is 3 cents lower at midday with outside market pressure 
alongside limited fresh news. Meal is $2 lower at midday and bean oil is 15 
points higher. The weekly report showed a net reduction in sales yesterday 
which was negative for beans, but sales to-date remain good with many looking 
for a slight export increase on Tuesday. The South American weather story 
remains uneventful. The chart pattern remains strongly sideways which should 
lead to a quiet afternoon. Looking to Tuesday the average trade guess is for 
the February USDA domestic carryover to come in at 445 million bushels versus 
440 on the January report. The world carryover is expected to be at 78.95 
versus 79.28 million metric tons on the January report. Expectations are for a 
small reduction in South American production of around half a million tons 
between Argentina and Brazil. Any unexpected modest changes on the report could 
give us a bigger move on Tuesday. On the March soybean chart support is at the 
low printed last week at $8.67. Resistance is now at the $8.76 1/2 20-day 
moving average.  


   Wheat trade is 4 to 6 cents lower at midday due to chart pressure. The 
weekly export sales number yesterday morning was a marketing year low 66,200 
metric tons supporting the bear argument, which is carrying into today. The 
average trade guess for the February USDA revised domestic carryover is 947 
million bushels versus 941 million on the January report. The global carryover 
is expected to be at 231.5 million metric tons versus 232.04 seen last month 
which was a new high for the crop year. On the March Kansas City chart we are 
down challenging support at the contract low at midday. Resistance is at the 
$4.75 20-day moving average. 

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered trading adviser.
David Fiala can be reached at 
Follow David Fiala on Twitter @davidfiala


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