DTN Midday Grain Comments 03/08 10:51
Soybeans Double-Digits Higher at Midday; Corn, Wheat Lower
Corn is 1 to 2 cents lower, soybeans are 12 to 14 cents higher, and wheat is
3 to 6 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is mostly higher with the Dow up 450. The dollar index
is 34 points higher. Interest rate products are weaker. Energies are weaker
with crude down $0.45. Livestock trade is mostly higher. Precious metals are
mixed with gold down $20.
Corn trade is 1 to 2 cents lower at midday with trade working back toward
steady at midday with two-sided trade so far after a strong start to the
overnight session giving way to a weak start to the day session with upfront
spreads slightly weaker. Ethanol margins are seeing support from energy values
and rising world ethanol prices, as well as spring driving demand building. The
daily export wire has remained quiet, for the most part, this week with limited
new-crop sales. Weekly export inspections were a bit soft at 1.544 million
bushels vs. the needed pace. Basis should remain sideways short term, as warmer
weather will help move grain to town with near harvest pace of inbound bushels
in some areas ahead of the start of spring fieldwork. Double-crop planting in
Brazil is well underway, as well, but behind the usual pace with rains limiting
progress. On the May contract, resistance is the 20-day at $5.45, which is
where we are just below at midday. The upper Bollinger Band at $5.61 is next
resistance, and the lower Bollinger Band at $5.29 is support.
Soybeans are 12 to 14 cents higher at midday with fresh highs scored again
overnight before fading toward the day session. The gains came on harvest
progress and quality concerns in Brazil, drier weather in Argentina and
potential African swine flu outbreaks all catching the eye of the market. Meal
is $0.50 to $1.50 higher, and oil is 90 to 100 points higher. Basis will likely
remain flat at strong levels with slower movement as the export program winds
down and a bigger focus on crush margins into spring with oil leading, and at
new highs again. Weekly export inspections continue their downtrend at 587,594
as the seasonal program winds up. The May chart has resistance at the recent
high at $14.60, with support the 20-day at $13.96.
Wheat trade is 3 to 6 cents lower at midday with trade remaining broadly
range-bound overall with support from row crops and mixed weather while the
intra-month spreads weaken. The dollar is above 92 on the index, getting back
to the upper end of the range with further consolidation at the upper end of
the range needed to weigh on trade. Concerns of the Fed fighting inflation are
triggering a bit of a flight to safety action, which has continued into the
start of the week. The Plains should see warmer weather, bringing the crop
closer to exiting dormancy soon. Some dry pockets still persist with rains to
favor the eastern growing areas. Weekly export inspections bounced a bit at
482,130 metric tons. KC is at a 28-cent discount to Chicago, with Minneapolis
at -6. KC May chart support is the lower Bollinger Band at $6.10, with
resistance the 20-day at $6.35, which we are just below.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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