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DTN Midday Grain Comments 01/18 11:47
All Grains Higher at Midday
Soybeans lead at midday with trade optimism boosting ag markets again.
By David Fiala
DTN Contributing Analyst
General Comments
The U.S. stock market indices firmer with the Dow 270 higher. The interest
rate products are firmer. The dollar index is 30 points higher. Energies are
firmer with crude up $1.60. Livestock trade is higher. Precious metals are
mixed with gold down $10.
CORN
Corn trade is 1 to 2 cents higher in quiet trade at midday with market
action looking to consolidate the late gains yesterday on improved trade
optimism. The South American recent weather pattern remains intact with a mix
of excessive rain and pockets of dryness with some potential improvement down
the road. Ethanol margins remain poor with futures still near the lows even
with firmer action this morning, while blender margins have struggled to
maintain gains for the time being. Winter weather will likely slow corn
movement again, keeping basis flat to firmer. The government partial shutdown
is expected to continue to limit news. On the March chart support is the
multiple moving averages at the $3.77-3.79 area, with resistance the upper
Bollinger Band at $3.83 7/8.
SOYBEANS
Soybean trade is 9 to 12 cents higher with trade building on the reversal
yesterday on increases trade optimism and South American weather with talk of
China making substantially offers towards future purchases. Meal is 3.50 to
4.50 higher, and oil is 25 to 35 points higher. South America weather items
remain in the recent weather pattern with harvest going early amid heat and
pockets of dryness in Brazil with generally disappointing yields so far, and
excessive rain potential in Argentina. Basis has been pretty flat with the
weather likely to add support. Forecasts are being monitored closely. Support
is the $9.06 50-day moving average, and resistance the 200-day at 9.25.
WHEAT
Wheat trade is 1 to 3 cents higher at midday with trade building on the
reversal from yesterday on talk of China importing wheat. The dollar has
bounced last week into this week, but remains in the lower part our two-month
range. Southern Hemisphere harvest will continue in the near term. North
American winter wheat should see a cool down this week, with snow cover
expected in front of the cold snap for most areas but will need to be watched
with longer-term forecast warmer. Russia domestic prices will be watched
closely with firmer values again there. On the March Kansas City chart, support
is the 50-day at $5.04 with resistance the upper Bollinger Band at $5.11.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
(BAS)
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