DTN Midday Grain Comments 03/27 11:46
Grains Trading Lower at Midday
Trade continues to drift lower at midday despite a weak dollar.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow futures down 100
points. The interest rate products are higher. The dollar index is 60 points
lower. Energies are mixed with crude down $0.30. Livestock trade is lower.
Precious metals are mixed with gold up $7.
Corn trade is 1 to 2 cents lower at midday with the light early buying
giving way to light selling during the day session with a lack of fresh news
and spillover pressure. Wet weather looks to hinder field work in the US, along
with wetter than desired weather in Argentina causing some issues. Ethanol
margins are steady to soft, and weekly export inspections remained strong at
1.556 million metric tons. Basis will likely remain steady this week as well
with pre-planting movement ongoing, and some areas of isolated strength showing
up. Lower prices are expected to lower planted acreage as well which is why we
have a hard time being negative next week, and do expect some volatility on
Friday around the two big USDA numbers: the March Planting Intentions and March
Quarterly Grain Stocks report. On the May chart support is at the $3.52 late
December low. Resistance is the 10-day at $3.61.
Soybean trade is 2 to 5 cents lower at midday with trade testing the lows
again after some initial positive action overnight. Meal is $1 to $2 lower and
oil is 10 to 20 points lower. Ideas of big soybean acreage, a rising South
American crop size and chart pressure continue to limit buying enthusiasm.
Harvest should continue to move along well in Brazil with Argentina seeing some
near term excessive wetness. The weekly export inspections were ok seasonally
at 555,012 metric tons. On the May soybean chart nearby support is hard to
identify. The one-year low is at $9.37 1/4. Resistance is at the 10-day and
lowest major moving average at $9.97.
Wheat trade is 2 to 8 cents lower at midday with trade continuing to see
pressure from the wetter forecast promoting growth on the southern plains along
with continued burdensome supply situation. The dollar is sharply lower but
that has not added much support so far. Warmer weather should continue to push
growth along as well with development likely already solidly ahead of normal.
The weekly export inspections remained solid at 541,799 metric tons. On the May
Kansas City contract support is at the low printed today at $4.21, with
resistance at the 100-day at $4.45.
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 Fiala on Twitter @davidfiala
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