DTN Midday Grain Comments 10/20 11:09
All Grains Lower at Midday
Trade is lower across the board at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the DOW futures down 40 points.
The interest rate products are higher. The dollar index is 5 lower. Energies
are lower with crude down $0.70. Livestock trade is mostly higher with fat
cattle leading. Precious metals are mixed with gold up $6.
Corn trade is 3 to 5 cents lower at midday with harvest pressure returning
with greater progress expected to be made in the field this week. Ethanol
margins remain under pressure from sliding crude prices pulling on ethanol but
overall margins and demand for ethanol remain positive. Harvest progress should
advance substantially this week, with only isolated delays; however, bean
harvest will take precedence in some locations. The weekly export inspections
were ok at 717,605 metric tons. The weekly crop progress report should show the
crop near full maturity, and harvest progress over the 1/3 mark, although
remaining well behind normal pace. On the December chart the $3.46 10-day
moving average is support which we have slipped just below overnight, with the
20-day at $3.35 below that; resistance is the $3.60 area. A continued open
forecast should keep pressure on into the afternoon.
Soybean trade is 10 to 13 cents lower at midday with harvest pressure
picking up to start the week. Meal is $2.50 to $3.80 lower and oil is 30 to 40
points lower. Harvest should advance rapidly on soybeans this week, with the
weather forecast pretty open overall. South American weather is showing
improvement in the coming forecasts. The weekly export inspections were huge at
1,991,537 metric tons. The weekly progress report should show the crop at
maturity, and harvest starting to close the gap vs. average, and will likely be
over the half-way point towards completion. On the chart, soybeans have moved
below the 10-day moving average at $9.46 overnight, and the 20-day moving
average at $9.35, which is support for now. Harvest pressure should intensify
this week for beans.
Wheat trade is 2 to 6 cents lower at midday with spillover pressure from the
row crops trumping the softer dollar trade for now. The more open weather
pattern should allow wheat drilling to catch up in Kansas, while the overall
crop should be able to establish itself early, but lingering dryness on the
southern plains could reemerge quickly if the drier pattern is sustained into
November. Australian weather continues to raise questions with dryness over a
good chunk of their wheat belt, and the Russian crop has some trouble spots
early but overall is in OK shape. The weekly export inspections were decent at
481,878 metric tons. The weekly progress report should show wheat planting just
behind the five-year average, and emergence should be running near average or a
little better. On the December Kansas City chart, wheat has support at the
10-day at $5.89, with resistance at the $6.08 50-day, which we tested on Friday.
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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