DTN Midday Grain Comments 10/26 11:11
Grains Trending Lower at Midday
Corn is 1 to 2 cents lower, soybeans are flat to 2 cents lower, and wheat is
9 to 15 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 700. The dollar index is
31 points higher. Interest rate products are higher. Energies are weaker with
crude down $1.35. Livestock trade is mostly lower. Precious metals are mixed
with gold up $1.70.
Corn trade is 1 to 2 cents lower at midday with mixed spread action to open
the week as we hold off inverting December/March for now. The export wire is
expected to remain active with the recent spread strength but no sales were
announced today. Ethanol margins remain under pressure with corn values
elevated as ethanol retains its premium to unleaded amid weakness in energies.
Basis will likely remain solid with snow slowing harvest. Weekly export
inspections were soft at 636,290 metric tons, with weekly crop progress showing
harvest past 75% and solidly ahead of normal but slowing with the weather. On
the December contract resistance is the fresh high at $4.20 with support the
20-day at $3.95.
Soybean trade is flat to 2 cents lower at midday with trade holding just
below the fresh highs in two-sided trade to start the week. Meal is $2.00 to
$3.00 lower and oil is 35 to 45 points higher. Brazil should continue to make
planting progress with the better rains short term, while Argentina continues
to remain slow in moving soybeans to crushers as their currency erodes in value
with the stronger dollar accelerating weakness to start the week. Basis remains
strong as we continue to work to max out our logistics capacity to ship the
needed export bushels. Weekly export inspections remain very strong at 2.664
million metric tons. Weekly crop progress should show harvest nearly complete.
The November chart has resistance at the fresh high at 10.89 3/4 with support
the 20-day at 10.43.
Wheat trade is 9 to 15 cents lower at midday with wetter weather encouraging
selling to start the week. The ruble action continues to favor Russia a bit in
the export markets but their domestic prices are now elevated but with improved
short term weather, along with too much rain in Australia as harvest starts.
Middle East buyers are becoming more active with tenders as well. KC is at a
68-cent discount to Chicago with spreads back to the recent highs, while
Minneapolis is back to 56 cent discount with very active spread action. Rains
look to be more wide spread for U.S. growing areas over the next seven-10 days.
Weekly export inspections were a bit softer at 363,806 metric tons. Kansas City
December chart resistance is the fresh high at $5.79 1/2, and support is the
20-day at $5.38.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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