DTN Midday Grain Comments 03/05 11:26
Grains Mixed at Midday
Corn has turned positive at midday with wheat still seeing some double-digit
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher at midday with the Dow futures up
30 points. The interest rate products are mostly higher. The dollar index is 30
higher. Energies are mixed with crude off $0.05. Livestock trade is mixed.
Precious metals are higher with gold up $3.
Corn trade is 2 to 3 cents higher at midday after initial weakness; momentum
is flat to higher. Ethanol margins have improved this week for producers with
cheaper corn, and rising ethanol values. Blender margins also remain strong,
and warming weather should encourage gasoline demand. The May futures
late-January low of $3.73 3/4 is key long-term support with resistance at the
$3.99-$4.01 area where we find the 50-day and 200-day moving averages. The
10-day, 20-day, and 100-day moving averages are all clustered around $3.89-91
which the market has chopped on both sides recently, but above at midday which
may generate chart buying this afternoon. The export sales were decent at
828,100 metric tons. The ethanol grind and export business the past month
should have the market looking for steady numbers on the USDA monthly supply
and demand numbers next Tuesday.
Soybean trade is 1 to 4 cents lower in quiet midday trade with meal flat to
$1 higher and bean oil down 30 to 40 points. The bean oil strength was
supportive for beans this past week, but it has fallen below support his
morning. The 3209-3225 on the May bean oil was important chart support; this is
where we find the 50-day, 10-day and 20-day moving averages. The 20-day at 3213
is the lowest major moving average. South America looks calmer on the logistics
front for right now, with Argentina catching plenty of rain, trending towards
excessive in some areas. The U.S. basis has slipped as well, enhancing downside
potential. On the May soybean chart we are below the $10.00 20-day moving
average which is now key resistance; a move back above here this afternoon may
keep sellers away. If we close below $10 today it opens up the potential for
more pressure before the week is over. The weekly export sales were OK at
499,500 metric tons, 130,200 tons of meal, and 5,600 tons of oil.
Wheat trade is 5 to 12 cents lower across the three contracts at midday,
with non-commercial selling keeping the momentum down. The dollar has pressed
into new highs today, keeping pressure on wheat export competitiveness. The
wheat trade remains oversold so market bulls argue we should see another round
of short covering on even the slightest news. On the May Kansas City chart, the
market is below all major moving averages with the $5.35 10-day nearby
resistance. Support is at the $5.18 low printed this morning. The weekly export
sales were 469,900 metric tons which was not large enough to impress the trade.
David Fiala is a DTN contributing analyst and the president of FuturesOne
and a registered Trading Adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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