DTN Midday Grain Comments 02/21 11:24
All Grains Higher at Midday
Broad gains at midday, albeit slightly off the overnight highs.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow 95 points lower. The
interest rate products are higher. The dollar index is 15 points higher.
Energies are mixed with crude 0.20 lower. Livestock trade is mixed with hogs
leading today. Precious metals are weaker with gold down $12.20.
Corn trade is 5 to 6 cents higher at midday with trade optimism, but the
USDA acres number limited gains after some short covering added support toward
the end of the night session. A 92-million-acre figure, up 3.35% year over
year, as the USDA Outlook estimate for 2019 U.S. Acreage. The second crop in
Brazil is being planted in good condition for now with planting heading past
the halfway point with early rains looking to be good for germination with some
short-term dryness in Argentina. The energy complex remains near the upper end
of the range, with weekly ethanol production dipping just below 1 million
barrels per day with stocks 447,000 barrels lower. Corn basis should firm again
with more weather disruptions with aggressive bids by some end users but the
higher board may stop the basis improvement if we hold our overnight gains.
Ethanol is a positive, up a penny and a half at midday. On the March chart
trade has support at the recent $3.68 1/2 low, the lower Bollinger Band at
$3.70 7/8, with more notable chart resistance clustered at $3.76-$3.78 which we
have been testing this morning.
Soybean trade is 5 to 7 cents higher with trade optimism and a lower U.S.
acreage number that market bears argue is already priced-in. Meal is flat to
$1.00 higher and oil is 40 to 50 points higher. The USDA Outlook forum noted a
85 million acre number for 2019 planted acreage, down 4.7% from 2018. South
America weather should maintain the recent pattern in the coming days with
Brazil harvest moving along and drier weather in Argentina with pod fill on
going. Crush margins remain strong. Trade talks will continue in the US this
week with some progress scored this week according to most sources and the
March 1 deadline looming, although there is more talk of an extension with
apparent good progress this week along with further Chinese purchase
commitments over a broad array of ag products. Export sales are delayed until
Friday with the shortened holiday week, when we expect to be provided 6 weeks'
worth at once. On the March chart resistance is now the moving averages
clustered at $9.09-9.14 which we just below, with support at the lows from
yesterday at $8.93 with oversold conditions in place.
Wheat trade is 6 to 8 cents higher at midday with good short covering
developing overnight, but trade will need to hold gains during the day session
with trade 3-4 cents off the highs. U.S. export business will remain in focus
after the U.S. didn't offer on the Egyptian tender yesterday. Iraq has barred
Russia over gluten content from their upcoming tender. The dollar has remained
flat after Fed guidance. Cold weather is expected to keep some stress on the
plains in the near term with winter wanting to hang around. On the March Kansas
City chart support is low at $4.49 1/4 with resistance the 10-day at $4.80.
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 him on Twitter @davidfiala
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.
DTN offers additional daily information available free through DTN Snapshot – sign up