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DTN Midday Grain Comments     09/18 11:17

   Soybeans Leading Grains Lower at Midday

   Grain trade is lower at midday with limited fresh news ahead of the expected 
record harvest. 

By David Fiala
DTN Contributing Analyst

General Comments

   The U.S. stock market indices are higher with the Dow up 90. The interest 
rate products are mostly higher. The dollar index is 2 lower. Energies are 
lower with crude down $0.80. Livestock trade is lower. Precious metals are 
lower with gold down $9.00. 


   Corn trade is 1 to 3 cents lower in quiet trade at midday. Weather remains a 
non-issue with the extended forecast turning mostly warmer. Ethanol producers 
have been heavily selling/hedging future production margins. This may have 
actually supported corn yesterday with hedgers buying corn along with the 
selling of ethanol. Ethanol is now more than 80 cents cheaper than unleaded on 
the board, which is under 70% of unleaded price. This should encourage more 
ethanol usage. Corn basis has started to weaken a bit more in front of the 
impending record harvest, but is still strong in some isolated locations. On 
the December chart, support is at the $3.35 3/4 low with resistance at the 
10-day moving average at $3.44. The weekly export sales were in the middle of 
the expected range at 659,700 metric tons. Some weekly sales numbers over 1 
million tons are likely needed to support the bull argument near term. Without 
bigger sales data the lower prices are not finding the demand needed to suggest 
the carryover estimate will stop getting larger.  


   Soybean trade is 8 to 12 cents lower and near the daily lows at midday. Meal 
is $6 to $7 lower, and oil is 40 to 50 points lower. Soybean basis is eroding 
rapidly as exporters and processors start to get fresh supplies. Notable 
November soybean chart support is at the new contract low printed last Thursday 
(USDA report day) at $9.69 with resistance at $9.91, where we find the 10-day 
moving average. The weekly export sales were good at 1.47 million metric tons 
of soybeans, 183,500 of meal, and 28,500 of oil. The quarterly stocks report is 
due out in 12 days. Many expect sideways to slightly lower price action the 
rest of the month until we get to that report. The significance of the 
September stocks report this year is muted with the expectations of a huge 
record 2014 crop.      


   Wheat trade is 7 to 10 cents lower at midday with renewed selling picking up 
following a low weekly sales number. The dollar is nearing 4-year highs on the 
expectation of interest rates beginning to move up, and European uncertainty, 
which continues to reduce export competitiveness for US wheat. The Southern 
Plains continue to battle ongoing drought, although improved this past month, 
it can still hinder early planting and development of wheat. The potential for 
heavy rain the next few days across the Southern Plains will need to be 
watched. Wheat is oversold on the charts with limited chart support to mention 
since we are at our lows. First resistance on the Kansas City December contract 
is at $6.07, the 10-day moving average. The weekly export sales were 
disappointing at 314,500 metric tons. 

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered Trading Adviser. 

   David Fiala can be reached at 

   Follow David Fiala on Twitter @davidfiala


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