DTN Midday Grain Comments 02/12 11:39
Grains Mixed at Midday
We have a very narrowly mixed midday market to wrap up a slow week ahead of
the three-day weekend.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are bouncing back with the Dow futures up 225
points. The interest rate products are lower. The dollar index is 55 points
higher. Energies are sharply higher with crude up $3, but we are still over $1
lower the week. Livestock trade is mostly higher. Precious metals are lower
with gold down $11 giving back some of the $53 gains seen yesterday.
Corn trade is fractionally mixed at midday; this is another slow session
with our overnight up to midday trading range less than 3 cents. Outside market
support is limiting upside, but with limited fresh news we are not seeing
buyers around either. The market has been in a quiet stalemate since the
slightly negative USDA report on Tuesday. The weekly export sales were not
supportive yesterday coming in below expectations at 405,000 metric tons but
some fresh business this week has been talked about. The weekly EIA number
Wednesday listed ethanol stocks 2.66% higher with production 1.04% higher and
gas demand up which was not friendly news. And the monthly USDA report held a
high carryover than expected giving us three days of negative news. Futures
sold off 5 cents on the week going into the USDA numbers on Tuesday but have
shown some resiliency from breaking much below $3.60. Market bulls at midday
hope we can see some short profit taking heading into the long holiday weekend.
Trade is closed on Monday due to the President's Day government holiday. On the
March chart the $3.67 level is resistance where we find the 20-day and 50-day
moving averages. Support is at the $3.58 1/2 low printed yesterday and this
morning then the $3.48 1/2 contract low.
Soybean trade is 1 to 2 cents lower at midday, meal is off $1.50 and bean
oil is up 25 points. Soybean trade has been mixed with a trading range from a
nickel lower to 2 cents higher. Bean oil is seeing spillover support from
crude. The dollar has bounced back a bit, up 50, but is still going to finish
the week poorly, which could lead to technical selling into the close this
afternoon. This big move down in the dollar in February is significant; fi the
trend continues it should be friendly for US commodities. On the March soybean
chart nearby resistance at the $8.75 1/2 20-day, with the 100-day at $8.81 our
resistance level above that. Support is at the $8.59 1/2 weekly low then the
$8.52 early January low. The 20-day was challenged again today, it is our daily
high at this juncture. If we find a reason to move above the 20-day this
afternoon expect sizeable buy stops.
Wheat trade is 1 to 3 cents higher at midday gaining back some weekly
losses. Most contracts at midday are only 2-6 cents lower on the week. The
weekly export sales did not support the upside momentum we had going into
Thursday so most do not expect buying interest to build this today, just see
range bound trade The overnight up to midday range has been around 2 lower to 4
higher. The USDA numbers were negative on Tuesday particularly the growing
global carryover which dashes most hopes for any real price optimism for 2016.
Production disruption by weather or a sharp reduction in global wheat plantings
is needed for this market to find a long term low. On the March Kansas City
chart the previous low at $4.51 3/4 is chart resistance then the 10-day at
$4.58. The high this morning is $4.51 1/2. The new contract low printed Tuesday
at $4.42 1/4 is chart support which we did challenge overnight.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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