DTN Midday Grain Comments 10/15 11:12
Grains Trending Lower at Midday
Quiet mostly lower trade at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 260. The dollar index is 20
lower. Interest rate products are firmer. Energies are mixed with crude down
$0.40. Livestock trade is mixed with hogs sharply higher. Precious metals are
weaker with gold down $12.00.
Corn trade is 2 to 3 cents lower with harvest pressure and overbought
conditions encouraging a pull back at midday. Harvest will remain slow but
should show progress through the end of the week before wetter weather returns
to the east. The ethanol margins have improved to start the week with ethanol
futures lower this morning with idled plants still needing a return to harvest
basis to restart. Basis remains flat to weaker with anticipation of more
inbound bushels soon. South American corn planting is running behind normal.
Weekly export inspections remain soft at 470,612 metric tons. Weekly crop
progress is expected to show slightly lower conditions with maturity still well
behind normal. On the December contract support is at the 10-day at $3.91, and
resistance the upper Bollinger Band at 4.03.
Soybeans are narrowly mixed with trade still chopping around the upper end
of the range with overbought conditions and harvest pressure battling improved
nearby demand. Meal is 2.00 to 3.00 lower and oil is 60 to 70 points higher.
Crush margins remain good. Economically, U.S. export competitiveness remains
improved, but remains at a steep currency disadvantage to South America with
harvest needed to boost competitiveness. Bean basis is should see pressure as
combines roll through midweek before rains return. South America should make
more progress this week and into the second half of the months with some
weather issues remaining and planting pace solidly behind. Weekly crop progress
is expected show slightly lower conditions and maturity still well behind
normal, with export inspections softer at 954,881 metric tons, along with
142,579 metric tons. On the November chart support is the 200-day at $9.10 with
the upper Bollinger band at 9.45, and the spike high at 9.45 3/4 as resistance.
Wheat trade is 3 to 6 cents lower at midday with trade giving back the
Monday gains with little fresh news. The Chicago/Kansas City December spread is
85 cents with choppy action continuing with mostly steady to slightly wider.
Remaining spring wheat harvest will likely be stopped with the incoming cold
front. The corn/HRW spread has widened back to 28 cents from 13 cents at the
recent low, working wheat back out of rations. Export action continues to be
dominated by Black Sea origin with weekly inspections range bound at 462,651
metric tons. Weekly crop progress should show winter wheat planting and
emergence inline with average. The December Kansas City chart support is the
$4.07-4.11 area where the 10,20, and 50-day moving averages are clustered with
the upper Bollinger Band at 4.22 as resistance, then the 4.27 3/4 recent high.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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