DTN Midday Grain Comments 02/23 11:22
Corn, Beans Lower at Midday
Trade is mostly lower at midday led by soybeans.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow futures up 25 points.
The interest rate products are higher. The dollar index is 35 points lower.
Energies are higher with crude up 0.70. Livestock trade is mixed with cattle
leading. Precious metals are mixed with gold up 18.10.
Corn trade is 4 cents lower at midday with soybean weakness helping to drag
trade lower. The weekly ethanol production report showed production down 21,000
barrels per day, stocks were 169,000 barrels higher, with gasoline demand
showing growth with the warm weather. Double crop planting in Brazil will
continue to expand in coming days. Basis remains soft, but better bids have
surfaced in some areas into March. The USDA outlook forum this week will shine
more light on expected 2017 acre figures with some information starting to come
out today with the baseline corn acre guess at 90 million acres Support is at
the $3.68 20-day and $3.66 200-day which we are tested yesterday, with
resistance now at the $3.72 10-day followed by the $3.80 high.
Soybean trade is 6 to 9 cents lower at midday with soybeans continuing to
drift lower as South American harvest progress continues in Brazil, and
Argentina continuing to mature. Meal is $2 to $3 lower and oil is 30 to 40
points lower. Crop size expectations remain strong for Brazil with harvest
gaining speed, with more eyes turning to logistics and currency issues to see
what kind of pace they can sustain. The slide in oil values has hurt crush
margins, which has helped to keep basis soft. The outlook forum pegged bean
acres at 88 million reflecting the expected increase in acres. On the March
soybean chart support is now at the $10.18 200-day which we are testing this
morning and then $10.00 and resistance at the 50-day at $10.34.
Wheat trade is narrowly mixed at midday with Minneapolis and Kansas City
trade leading overnight. The weaker dollar should add support, with the softer
row crop trade limiting upside this morning. The winter wheat should continue
to gain vs. the spring wheat with protein issues moving to the back burner for
now. The warm stretch will continue to raise concerns about breaking dormancy.
Kansas, Oklahoma, and Texas caught some rains over the weekend, but western
Kansas remains drier. On the March Kansas City contract support is at the $4.50
200-day. Resistance is at the seven-month high at $4.74 1/2, which was printed
on Thursday with the 10-day at $4.59 just above the market.
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 Fiala on Twitter @davidfiala
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