DTN Midday Grain Comments 02/26 11:03
Wheat Trending Higher at Midday
Corn is narrowly mixed at midday, soybeans are 5 to 7 cents higher, and
wheat is flat to 3 cents higher.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 400. The dollar index is 15
higher. Interest rate products are mostly firmer. Energies are mixed with crude
up $0.20. Livestock trade is firmer. Precious metals are weaker with gold down
Corn trade is narrowly mixed midday with trade holding the lower end of the
range with trade struggling to follow soybeans and wheat. Ethanol margins
remain tight with ethanol futures holding the low end of the range, with the
weekly report showing a production bump of 14,000 barrels per day, while stocks
were down 63,000 barrels. Corn basis remains steady, with little change in
recent days but more open weather should help movement along with March basis
contracts coming due this week. USDA announced 123,000 metric tons of
optional-origin corn sold to South Korea. On the March contract support is the
lower Bollinger Band and the fresh lows at $3.70 marked yesterday, with
resistance at the lower Bollinger band at $3.73, which are just below.
Soybean trade is 5 to 8 centS higher with trade finding better buying
mid-morning as trade closes back in on $9.00 on the May contract. Meal is $5.00
to $6.00 higher, and oil flat to 10 points lower. South America continues to
make good progress with weather and harvest moving forward with little change
on the horizon with some rain delays in Brazil keeping harvest off the average
pace. The Brazilian ral remains very cheap as well hurting US export
competitiveness near term with new lows scored this week. New crop soybeans
will need to gain vs. corn to provide an acreage incentive ahead of planting in
the U.S. with positive action today. The March soybean chart support is the
lower Bollinger Band at $8.69, with resistance the 20-day at $8.85, which we
are testing at midday.
Wheat trade is flat to 2 cents higher with trade looking to continue to hold
the lower end of the range and light buying again after early weakness. Weather
threats for the Plains remain limited with mostly warmer short-term weather
after the recent rain and snow. Kansas City is at an 85-cent discount to
Chicago, with choppy action so far while Minneapolis is back to a 22 cent
discount as well, narrowing sharply from last weeks action. Partial condition
reports Monday showed no major issues so far for the plains states. World
export business has been quieter in recent days. The March Kansas City chart
support is $4.50 with resistance the lower Bollinger Band at $4.54, which we
are just above at midday.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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