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DTN Midday Grain Comments     02/21 11:24

   All Grains Higher at Midday

   Broad gains at midday, albeit slightly off the overnight highs.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are weaker with the Dow 95 points lower. The 
interest rate products are higher. The dollar index is 15 points higher. 
Energies are mixed with crude 0.20 lower. Livestock trade is mixed with hogs 
leading today. Precious metals are weaker with gold down $12.20. 


   Corn trade is 5 to 6 cents higher at midday with trade optimism, but the 
USDA acres number limited gains after some short covering added support toward 
the end of the night session. A 92-million-acre figure, up 3.35% year over 
year, as the USDA Outlook estimate for 2019 U.S. Acreage. The second crop in 
Brazil is being planted in good condition for now with planting heading past 
the halfway point with early rains looking to be good for germination with some 
short-term dryness in Argentina. The energy complex remains near the upper end 
of the range, with weekly ethanol production dipping just below 1 million 
barrels per day with stocks 447,000 barrels lower. Corn basis should firm again 
with more weather disruptions with aggressive bids by some end users but the 
higher board may stop the basis improvement if we hold our overnight gains. 
Ethanol is a positive, up a penny and a half at midday. On the March chart 
trade has support at the recent $3.68 1/2 low, the lower Bollinger Band at 
$3.70 7/8, with more notable chart resistance clustered at $3.76-$3.78 which we 
have been testing this morning. 


   Soybean trade is 5 to 7 cents higher with trade optimism and a lower U.S. 
acreage number that market bears argue is already priced-in. Meal is flat to 
$1.00 higher and oil is 40 to 50 points higher. The USDA Outlook forum noted a 
85 million acre number for 2019 planted acreage, down 4.7% from 2018. South 
America weather should maintain the recent pattern in the coming days with 
Brazil harvest moving along and drier weather in Argentina with pod fill on 
going. Crush margins remain strong. Trade talks will continue in the US this 
week with some progress scored this week according to most sources and the 
March 1 deadline looming, although there is more talk of an extension with 
apparent good progress this week along with further Chinese purchase 
commitments over a broad array of ag products. Export sales are delayed until 
Friday with the shortened holiday week, when we expect to be provided 6 weeks' 
worth at once. On the March chart resistance is now the moving averages 
clustered at $9.09-9.14 which we just below, with support at the lows from 
yesterday at $8.93 with oversold conditions in place.


   Wheat trade is 6 to 8 cents higher at midday with good short covering 
developing overnight, but trade will need to hold gains during the day session 
with trade 3-4 cents off the highs. U.S. export business will remain in focus 
after the U.S. didn't offer on the Egyptian tender yesterday. Iraq has barred 
Russia over gluten content from their upcoming tender. The dollar has remained 
flat after Fed guidance. Cold weather is expected to keep some stress on the 
plains in the near term with winter wanting to hang around. On the March Kansas 
City chart support is low at $4.49 1/4 with resistance the 10-day at $4.80.

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered adviser
He can be reached at 
Follow him on Twitter @davidfiala


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