DTN Midday Grain Comments 09/20 11:35
All Grains Trading Higher at Midday
Trade is lower across the board at midday in slow trade.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed; the Dow futures are up 12. The
interest rate products are mixed. The dollar index is 10 lower. Energies are
mostly higher with crude up 85. Livestock trade has cattle higher and hogs
mixed. Precious metals are higher with gold up $5.
Corn trade is 1 to 2 cents higher at midday and we have been up 3 cents. In
the big picture the trade looks comfortable trading within the range of the
USDA report day last week. Next Friday we will have the quarterly grain stocks
report. The weekly EIA numbers listed ethanol production 1.34% lower on the
week with stocks 0.03% higher. Gasoline demand was off 1.82%. Ethanol margins
movement is not good today with ethanol down a penny and corn up 1 to 2 cents
at midday. Harvest should continue to make progress with warmer near term
weather before a potential shift cooler and wetter next week. Basis has been
fairly steady this week. On the December chart support is at the $3.44 1/4
August low with resistance at $3.53, where we find the 10-day and 20-day moving
averages, which are also the lowest major moving averages. The technical trend
remains down with trade below all major moving averages and trade is not
currently oversold. Market bulls argue this is old news and we have not slipped
further at this juncture.
Soybean trade is 3 to 4 cents higher at midday; meal is $1.50 higher and
soybean oil is up around 10 points. The trading range has been a dime and
mostly positive for beans with November continuing to find selling interest in
the $9.75-$9.80 area. South America looks to remain mostly dry near term with
major planting progress just around the corner with improved rains for Brazil
expected next week. The export news is expected to remain positive but buyers
may be starting to back off and wait for lower prices during the US harvest. On
the November chart support was at the 10-day at $9.65 is once again support
with the bounce back late yesterday with the 20-day at $9.56 below that, with
the 200-day at $9.79 3/4 major resistance.
Wheat trade is 2 to 3 cents higher at midday. Wheat trade is trying to work
back to the upper end of the range with follow-through buying after the late
rally yesterday. Australia continues to see some struggles as the crop emerges
from dormancy, while the large Russian crop will continue to keep pressure on
the ability of the US to compete on the world market. Canadian production
estimates yesterday left the sharp decline in wheat production intact. Egypt is
starting to look around for cargoes again. On the December Kansas City contract
we slipped below the 20-day at $4.38 with longer term support the $4.20
contract lows with resistance at the recent high at $4.51 3/4, with the 50-day
at 4.72 above that.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Advisor.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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