DTN Midday Grain Comments 04/17 11:24
Corn, Beans Lower at Midday
Slow position-squaring action is seen at midday ahead of the three-day
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow futures down 7. The
interest rate products are higher. The dollar index is 7 lower. Energies are
higher with crude up $1.00. Livestock trade is mixed with the most strength in
hogs. Precious metals are lower with gold down $3.
Corn trade is 2 to 4 lower at midday with a light favorable bias toward
better spring weather next week, outside markets mostly neutral. Trade this
week has been very sideways but we will need to watch for a drop below key
chart support today and early next week. This is at the 20-day moving average
which his at 4.97 on both the nearby May and new crop December contracts. The
weekly export sales were a bit softer at 601,900 metric tons of old crop, and
192,600 metric tons of new. A daily announcement of 125,000 ton of old crop was
sold to South Korea. Basis has stayed mostly sideways and should see
improvement if farmers can get into the fields soon, or if the futures break.
The extended weather forecast suggests there should be planters rolling over
much of the Corn Belt before the end of the month. There will be no trade
Friday and grain markets will resume with the Sunday night session. Based on
our midday action trade should be quiet this afternoon, then we will react to
the latest forecasts and weekend weather on Sunday night/Monday.
Soybean trade is 4 to 8 lower on old crop after hitting new highs overnight.
New crop is flat to 3 higher. Meal is $3 to $5 lower and oil is 10 to 20 points
lower. The July-November spread firmed into new high levels overnight up to
2.75 before softening. The weekly export sales were mixed with 19,200 metric
tons of old crop, 400,700 of new crop, 36,600 of meal, and 5,500 of soyoil.
Overnight we did trade to new highs for the move, some new contract highs in
the complex, but light profit taking is the theme at midday. New-crop beans may
be getting a light lift from exiting bull spreaders providing the best
opportunity in over eight months for new-crop hedgers. On the May chart nearby
support is at the $14.87 10-day, then the $14.67 20-day. Resistance is at the
$15.31 3/4 high printed overnight.
Wheat trade is 4 to 10 higher across the three exchanges at midday. The
weekly export sales were decent at 438,000 metric tons of old crop and 359,900
of new crop, which has limited downside. Also strength is noted due to light
short covering ahead of the long weekend with continued Ukrainian uncertainty.
Decent showers are forecast for the weekend in central and eastern Kansas, but
the concerns about freeze damage and overall dryness over much of the belt will
linger. We moved above all major moving averages then slipped back near the
20-day and highest major moving averages, which are at $6.86 on the May
Chicago, and $7.54 on the May Kansas City. If we can hold above these levels
all day, buying going into the long weekend is likely.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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