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DTN Midday Grain Comments 02/02 11:00
Corn, Wheat Lower at Midday; Soybeans Higher
Corn trade is 5 to 6 cents lower; beans are 5 to 7 cents higher, and wheat
trade is 6 to 13 cents lower.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
Corn trade is 5 to 6 cents lower; beans are 5 to 7 cents higher, and wheat
trade is 6 to 13 cents lower. The U.S. stock market is mixed with the Dow down
90 points. The Dollar Index is 30 points higher. Interest rate products are
firmer. Energies are mixed with crude down 0.50 and natural gas up 0.08.
Livestock trade is higher. Precious metals are mixed with gold 5.00 lower.
CORN:
Corn trade is 5 to 6 cents lower at midday with early strength fading during
the day session with weaker spread action and little fresh news to sustain
buying. Ethanol margins have support from natural gas while blender margins
tighten again as unleaded fades from the recent highs with spring driving
demand right around the corner. Crop development will continue to be watched
with drier weather short term in Argentina, and early double crop planting in
Brazil underway. The daily export wire has been quiet this week with weekly
sales very good at 1.59 million metric tons (mmt) (62.7 mb) of old crop, and
163,200 mt (6.4 mb) of new crop. Basis has stabilized in the west with above
average action holding up overall. On the March chart, support is at the $6.72
20-day moving average which we are just above at midday with the upper
Bollinger Band at $6.94 the next round up, which we have faded from last week
with a fresh high for the move being scored at $6.88 3/4, which we tested
Wednesday.
SOYBEANS:
Soybeans are 5 to 7 cents higher at midday with trade firming back towards
the middle of the recent range with mixed spread action as new crop gains, but
we have faded off the day's highs. Meal is 2.50 to 3.50 higher and oil was 25
to 35 points lower. The daily export wire has remained quiet as we watch for
more action from China as they return from holiday with weekly sales softening
at bit at 736,000 old crop (27.0 mb), 192,000 new crop (7.1 mb), meal 165,400
mt old, 4,200 new, and 900 mt of oil. South American weather should help
stabilize the Argentina crop with more rain needed for sustained improvement,
while Brazil harvest should pick up the pace a little bit more. Basis remains
mostly sideways near term. March chart support is at the $15.10 20-day which we
remain solidly above, with the Upper Bollinger Band at $15.49.
WHEAT:
Wheat trade is 6 to 13 cents lower at midday with trade backing off the
fresh highs scored early in the day session to see some long profit taking as
spreads flatten out as we back off the increasingly overbought conditions. The
Southern Plains should show improvement into the second week temperature wise
with the best rain shots for the eastern plains, with some Russia dryness, and
logistical issues on the horizon. Matif wheat values are a bit softer as well,
potentially limiting upside. Weekly export sales were soft at 136,400 metric
tons of old crop, and 32,500 mt of new. On the chart, KC March has support at
the 20-day moving average at $8.47 which we are solidly above, with the recent
high at $8.95 as resistance with the Upper Bollinger Band at $8.91 which we are
testing overnight.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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