DTN Midday Grain Comments 01/27 11:31
Corn, Beans Lower at Midday
Wheat is mixed, row crops lower in slow midday trade.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are sharply lower at midday with the DOW
futures down 330 points. The interest rate products are higher. The dollar
index is 75 lower. Energies are higher with crude up 90. Livestock trade is
mostly higher. Precious metals are higher with gold up $13.
Corn trade is 3 cents lower in quiet action with trade continuing to move
around in the recent trading range. Ethanol prices are down a little this
morning which has pulled on corn along with the weak stock market. The weekly
export inspections yesterday were stronger at 886,625 metric tons and obviously
we saw the big sales number last week. So a greater than normal attention
should be on the weekly sales report on Thursday along with attention on the
ethanol production number tomorrow on the weekly EIA numbers. The warmer
weather in the plains should limit feed demand in the near term. March chart
resistance is at $3.93, the 20-day moving average with support at the $3.77
100-day moving average.
Soybean trade is 6 to 8 lower at midday, meal is $1 to $2 lower and bean oil
is 1-5 points lower. Beans have been down around a dime so we found resistance
up toward the $9.90 area on the nearby March contract. Action is slow at
midday. South American weather forecasts remain mostly good with most of the
concerns concentrated in Northern Brazil. Soymeal continues to maintain an
inverse with good demand for the front month, and overall meal is the main
leader of the complex. The March soybean chart resistance is the 10-day moving
average at $9.87, with limited nearby March support other than the $9.67 low
printed yesterday. Major support is at $9.20 which is our contract low printed
in early October.
Wheat trade narrowly mixed at midday. Spillover pressure from the row crops
is limiting upside. We will see if this is a repeat of yesterday with mixed
trade early giving way to pressure late. Fundamental weakness is noted due to
demand concerns. Trade is oversold with new lows for the move yesterday and
today. Warmer weather across the Southern Plains will limit wheat stress but
could encourage some wheat to leave dormancy early, although the forecasted
early February cold seems to have moderated a bit. The March KC 10-day and
lowest major moving average, at $5.69, serves as nearby chart resistance with
limited support because we slipped to a new contract low, not just low for the
move. This could lead to long liquidation late today if we cannot get back
above the previous $5.54 October contract low.
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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