DTN Midday Grain Comments 01/19 11:24
Grains Narrowly Mixed at Midday
Narrowly mixed slow midday trade is seen at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow futures down 20. The
interest rate products are lower. The dollar index is 11 points higher.
Energies are mixed with unleaded down a penny and crude up $0.40. Livestock
trade is mostly higher. Precious metals are lower with gold down $12.
Corn trade is a penny higher at midday in slow trade. Ethanol is down 2
cents at midday with another disappointing January day for ethanol production
margins. Ethanol stocks were up 5.54% on the weekly EIA estimates with
production up 0.48% with gasoline demand estimated 4.73% lower. DDG prices have
fallen as well albeit they may see some support due to the spike in meal this
past week. This is limiting upside in corn today, and in the bigger picture.
Argentine weather continues to be the noted supportive factor with highs in the
90s and low 100s the next 10 days with limited moisture in the forecasts.
Commodity funds have been adding length this week, if it continues there may be
short covering late today into Friday. There is plenty of hedge selling
interest on higher prices which has kept corn from sharp upside moves with
funds adding length this week. The weekly export sales report is delayed until
tomorrow. On the March corn chart support is at the $3.60 10-day moving average
then the 20-day at $3.55. Resistance is at the $3.69 6-month high followed by
the $3.70 200-day moving average. The morning high has been $3.67.
Soybean trade is a penny lower this has us near the daily highs after
trading 8 lower. Meal is down $1 and bean oil is up 10 points. The weakness
overnight was noted as light long profit taking, granite a change in the
forecasts could quickly have futures crashing lower, but for now the weather
news has not changed. There is concern and reason for weather premium. On the
March soybean chart support is at the 10-day and highest major moving average
at $10.34. The high printed yesterday at $10.80 is resistance which was a new
6-month high. The next level of resistance would be the $11 area; then the
March futures high last June at $11.35. The chart still looks like a potential
double top here even though we surpassed the late November high by about a
nickel it is still close. If the weather forecast remains supportive, and fund
buying continues like it has this week, a short squeeze by market logs may
occur. Brazilian weather is more favorable, so there is a favorable weather
picture as well.
Wheat trade is again mixed with Minneapolis up a nickel at midday, Chicago
down 4 and Kansas City down 5 cents. This market has the ability to be volatile
on any day over the next several weeks following the move this month. Activity
today is moderate. The Minneapolis contract has been more dynamic; there has
been a 50 cent rally just this month, and the high on Tuesday was a full dollar
above the low printed at the end of August. So we've priced-in some recovery
from oversold conditions and a few spring wheat production problems. But world
supplies still remain historically very large. The March Kansas City chart
support is at the $4.42 10-day moving average, resistance is at the $4.59
200-day moving average.
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 Fiala on Twitter @davidfiala
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