DTN Midday Grain Comments 02/20 11:25
Grains Mixed at Midday
Overnight gains fade again with wheat remaining the downside leader.
By David Fiala
DTN Contributing Analyst
Corn is 1 cent lower, soybeans are 4 cents lower, and wheat is 5 to 11 cents
lower at midday. Outside markets are mostly positive.
Corn trade is narrowly mixed at midday with trade trying to hold gains amid
spillover selling pressure from soybeans and wheat. The second crop in Brazil
is being planted in good condition for now with planting heading past the
halfway point with early rains looking to be good for germination. The energy
complex remains near the upper end of the range, with ethanol futures still
struggling to extend into the mid $1.30 range, with the weekly report delayed
until tomorrow. Corn basis should firm again with more weather disruptions. On
the March chart trade has support at the recent $3.68 1/2 low, the lower
Bollinger Band at $3.70 7/8, with more notable chart resistance clustered at
$3.76-$3.78. The trading range has been tight but we are near a 3-month low.
Soybean trade is 3 to 5 cents lower at midday with selling returning
overnight after some early buying with little concrete fresh news. Meal is $1
to $2 lower and oil is flat to 10 points lower. South America weather should
maintain the recent pattern in the coming days with Brazil harvest moving along
and drier weather in Argentina. Crush margins remain strong with meal holding
$300 a ton or better still. Trade talks will continue in the US this week with
some progress scored this week according to most sources and the March 1
deadline looming, although there is more talk of an extension. On the March
chart resistance is now the moving averages clustered at $9.13-9.15 which we
just below, with support at the lows from today at $8.93 with oversold
conditions as well.
Wheat trade failed to sustain early buying again with trade 4 to 12 cents
lower with spread trade starting to unwind vs. Chicago today. The US has seen
better export business lately, but world prices have followed the US selloff
with some Black Sea and French tenders securing business to Egypt today, with
selling prices $20 a ton lower than last time. The dollar reversed yesterday
with trade looking to see if it becomes a multiday thing with Fed guidance
today. Cold weather is expected to keep some stress on the plains in the near
term with winter wanting to hang around. On the March KC chart support is low
at $4.49 3/4 with resistance the 10-day at $4.91.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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