DTN Midday Grain Comments 10/23 11:23
Grain Futures Firm at Midday
Grain trade is firm across the board at midday
By David Fiala
DTN Contributing Analyst
U.S. stock market indices are higher with the Dow futures up 200 points.
Interest rate products are lower. The dollar index is 5 higher. Energies are
higher with crude up $1.20. Livestock trade has cattle higher and hogs lower.
Precious metals are lower with gold down $17.
Corn futures are 3 to 4 higher at midday with support from a good sales
number and outside markets. The high this morning was within 3 cents of the
high seen Wednesday, which is a 2-month high. Outside markets are supportive
with stocks and crude higher, which occurred after better-than-expected China
and EU economic data. Harvest should continue to make fairly rapid progress
after a brief delay due to moisture Wednesday and today. This is not a good day
for ethanol margins with corn up 4 and nearby ethanol futures down 4 cents. The
weekly export sales were good at 1.03 million metric tons. Weekly number above
1 million tons should be viewed by most as a positive item for the market if
they become a consistent thing. December chart resistance is at the $3.61 high
printed yesterday then the $3.81 high printed in mid-August. Support is at the
$3.48 10-day, then the $3.38 20-day.
Soybean futures are around 15 cents higher at midday following two-sided
trade overnight. Meal is $5 to $9 higher and bean oil 50 points higher. Good
sales numbers and buying at support have the market with light upside momentum
at midday. Harvest should continue to advance quickly on soybeans this week
with harvest pushing well past the halfway point. Basis has improved at some
end user location but country elevators continue to back their basis off as
harvest progresses. South American weather will continue to be a potential
issue with planting off to a very slow start, and the forward forecasts lacking
widespread agreement on rains but a near-term upturn in moisture appears
likely. The weekly export sales were over 2 million metric tons for beans,
which was above expectations. Meal sales were 23,000 tons and oil 10,600 tons.
On the November chart the 50-day at $9.81 held as resistance when tested
Wednesday and we are testing it again. Chart support now at the $9.55 10-day,
then the $9.38 20-day moving average. The 10-day held as support overnight.
Wheat futures are steady to a nickel higher across the three contracts at
midday. Spillover support is coming from the row crops, but the low weekly
sales total this morning has limited buying in wheat. The weekly sales were
only 299,400 metric tons, which was below the range of expectations. Weather
remains a mixed bag with some trouble spots worldwide, especially in Australia.
U.S. planting progress should pick up in the week ahead with more open weather
in Kansas, but the longer-term forecast looks dry for the Southern Plains as we
get deeper into fall. On the December KC chart, wheat has support at the 10-day
at $5.95, with resistance at $6.15 where we find the 1-month high.
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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