DTN Midday Grain Comments 09/20 12:21
Soybeans Lead Grains Higher at Midday
Soybeans lead sharply higher trade at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow futures up 270. The
interest rate products are mixed. The dollar index is 55 lower. Energies are
mixed with crude down 0.30. Livestock trade is mostly higher. Precious metals
are mixed with gold flat.
Corn trade is 7 to 9 cents higher with trade trying to build on the positive
finish from Wednesday as harvest continues ahead of more rain. Also, we have
continued export interest with Mexico securing 160,000 metric tons of corn,
mostly for 2018-19 crop year. Wetter near-term weather may slow harvest
progress in many areas this week, while other areas are moving along quickly.
Ethanol margins remain tight with production likely to fade near term even
after strong runs last week and futures continuing to trend lower. Corn basis
will likely see more pressure harvest here in the near term. The weekly export
sales were strong at 1.38 million metric tons. On the December chart, support
is at the fresh contract low printed Tuesday at $3.42 3/4 with the 10-day at
$3.54 noted nearby resistance, which we are testing at midday.
Soybean trade is 15 to 20 cents higher at midday with two-sided trade giving
way to aggressive buying on trade optimism. Meal is $4.50 to $5.50 higher, and
oil is 30 to 40 higher. Soybean basis remains historically wide across the belt
with storage and shipping concerns continuing to dominate with more business to
South America showing up to feed crushers. Crush margins remain strong in the
near term. Early planting in South America is underway with conditions on the
dry side going in but no major concerns expected for a while. The Brazil and
Argentina currencies remain historically cheap with the real falling back to
the lows. China lowered tariffs on neighboring countries, which could offer
some more workarounds on trade. Weekly export sales showed improvement at
917,600 metric tons of beans, 59,600 of old-crop meal, 77,800 of new meal,
9,600 of old oil and 8,600 of new. On the November chart support is fresh lows
at $8.12 1/4 scored Wednesday, with the 10-day at $8.32 and the 20-day at $8.37
noted resistance levels with trade testing the 10-day at midday.
Wheat trade is flat to 2 cents lower at midday with trade pulling back from
the strength on Wednesday even with the weaker dollar and better chart action.
World wheat prices have edged lower overnight as well. The U.S. dollar is at
the bottom of the recent range. Russia will continue to work on spring wheat
harvest and winter wheat planting with mixed moisture. Australia looks to have
more mixed weather in the near term with longer-term dryness still an issue as
we get closer to harvest there, and some frost in Western Australia with
production estimates sliding. Weekly export sales were in line with recent
weeks at 468,400 metric tons. On the December KC chart, we have support at the
10-day at $5.17, which we moved above today with the 20-day at $5.27 the next
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser. He can be reached at email@example.com
Follow him on Twitter @davidfiala
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