DTN Midday Grain Comments 05/03 11:25
All Grains Lower at Midday
Trade is lower across the board at midday with wheat leading trade lower.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower, with the Dow down 205. The interest
rate products are lower. The dollar index is 26 points higher. Energies are
lower with crude down 1.30. Livestock trade is mostly higher. Precious metals
are lower with gold down $9.
Corn trade is 11 to 12 cents lower at midday due to a number of items. There
is talk of increased acreage in Brazil offsetting weather issues, plus outside
markets are weak. Crop progress listed plantings at 45% which was in line with
last year, and 15% ahead of the average which is providing pressure. Emergence
was listed at 13% versus 7% last year and an 8% 5-year average. Weather is
warming, which is welcome and will be good for the crop. Basis has started to
stabilze after dropping off sharply with the rally. On the July chart, trade
has set back below the 10-day and 200-day moving averages at $3.87 and the
20-day at 3.80, which are now resistance and the 50-day at $3.72 is support.
Soybean trade is 10 to 15 cents lower at midday with trade reversing from
new highs posted overnight with continued volatile trade. Meal is $6 lower and
bean oil is down 15 points. Momentum is down, so this does appear to be a key
reversal day at this juncture. Crop progress listed 8% of the soybean crop
planted versus 10% last year and a 6% 5-ear average. The market will start to
focus on saturated areas where corn planting could get late and move to beans,
otherwise for the start of May the planting progress is a fairly neutral market
item at this juncture. Harvest progress should continue to pick up in South
America with questions remaining about quantity and quality in Argentina. On
the July soybean chart the 10-day moving average at $10.24 is support which we
are testing at midday with resistance at the $10.57 high printed overnight.
Wheat trade is 10 to 16 cents lower across the contracts with the dollar
reversing higher and good yield potential on the wheat tour encouraging selling
at midday. The Kansas wheat tour will continue through the end of the week, and
is expected to continue to confirm strong yield potential outweighing the
reduced acres. The weekly progress numbers listed 42% of the winter wheat
heading versus the 34% average. Spring wheat was 54% planted versus the 39%
average. The winter wheat conditions were 2% better at 61% good to excellent
versus 43% a year ago. The July Kansas City chart has resistance at the $4.74
20-day with support at the recent and contract lows printed in March at $4.52
3/4, which we are not too far from at midday.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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