DTN Midday Grain Comments 09/19 11:09
Grains Trending Higher at Midday
The mixed trade at midday with soybeans and spring wheat leading.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow 120 higher. The dollar index is
20 points lower. Interest rate products are weaker. Energies are firmer with
crude up $0.30. Livestock trade is mixed. Precious metals are weaker with gold
Corn is flat to 1 cent higher with trade still struggling to extend the
upper end of the range and light two-sided action today. Weather remains a
short-term non-issue with warm temps and some wet weather in areas to move
along late-crop development and maturity before trending drier towards October
with some of the storms slowing early harvest in the West. Corn basis is
expected to continue to see pressure with harvest underway in more areas, and
more coming soon. Ethanol futures are slightly lower with improved margins
holding on. Weekly export sales were strong at 1.46 million metric tons. On the
December contract support is at the 20-day at 3.65 with the upper Bollinger
band above trade at 3.77.
Soybean trade is 3 to 5 cents higher with a new bullish catalyst needed to
move trade through $9.00 nearby. Meal is $0.50 to $1.50 higher and oil is 10 to
20 points lower. Crush margins remain good, but the bull argument needs a
positive export story with weekly export sales very strong with the China
buying at 1.73 million metric tons of soybeans, 93,700 metric tons of old meal,
342,100 of new meal, and 20,600 of oil combined. Economically, U.S. export
competitiveness is improving which may be just as important as trade
negotiations to get some business done. Bean basis remains flat in the
interior. South American currencies remain weak as planting season draws closer
with dry weather to start, potentially delaying things early on. On the
November chart we near support at the 100-day at $8.86 and the upper Bollinger
Band at 8.98, and the 200-day at 9.15 as resistance.
Wheat trade is 2 cents lower to 8 cents higher with Minneapolis trade
leading on quality concerns. The Kansas City/Chicago spread is 77 cents, down 7
cents from the high this week. The corn/HRW spread is hanging around the 35-40
cent area. So Kansas City wheat is competitive on the world market but we need
to see the business and more buyers to move the board out away from our lows
with feed competitiveness still in place for the southern plains. The weekly
export sales were disappointing at 286,600 metric tons. The December Kansas
City chart support is at the 20-day at $3.99 1/2, with resistance at the upper
Bollinger Band at 4.13 which we have tested today.
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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