DTN Midday Grain Comments 01/28 10:55
Corn, Soybean Wheat Futures Higher at Midday
Corn futures are 5 to 6 cents higher at midday Friday; soybean futures are
18 to 20 cents higher; wheat futures are 12 to 18 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 80 points. The U.S. Dollar
Index is 15 points lower. Interest rate products are mostly higher. Energies
are firmer with crude up 1.50. Livestock trade is mixed with cattle leading.
Precious metals are weaker with gold down 10.00.
Corn futures are 5 to 6 cents higher at midday, following soybeans higher
and scoring fresh highs again with spread action firming again. Ethanol margins
continue to deteriorate as stocks pushed to the highest levels since last May,
with short-term demand remaining soft. Trade will continue to look for further
sales confirmation on the daily wire, which was quiet for corn Friday. Basis
should remain rangebound to slightly weaker in the short term with weather
likely to slow short-term movement in some areas. Trade will continue watching
South American weather as we head into second crop planting and development. On
the March contract we have support at the 20-day moving average at $6.05 then
the fresh high scored Friday morning at 6.35 1/4 as resistance.
Soybean futures are 18 to 20 cents higher at midday with trade pressing into
new highs again with spread action remaining solid as the front months get
closer to flat. The daily export wire confirmed some of the rumored export
sales with 264,000 metric tons (mt) of new crop to China; 251,500 mt of new
crop to unknown; and 141,514 mt of old crop to Mexico. Meal is $3.50 to $4.50
higher and oil is 130 to 140 points higher. Basis is flat to weaker short term.
Crush margins are hanging in there with the product strength this week, with
meal finally trying to consolidate over $400 a ton. Early harvest is underway
in South America, likely to further crimp U.S. export competitiveness in
February with a more mixed forecast again into February. On the March soybean
chart, we have resistance at the fresh high at $14.79, with trade well above
the 20-day at $13.97 support.
Wheat futures are 10 to 18 cents higher at midday, following the row crops
higher after the midweek washout on better weather and a slowdown in the
escalation of Russia/Ukraine tensions. The dollar is near new highs after the
Fed statement Wednesday. Plains weather looks a little drier in the short term
with the crop likely to stay dormant and some areas having better snow cover
now. Spring wheat is firmer versus Chicago, moving the premium to $1.32 on the
March, with KC at a 16-cent premium in flat action. KC March chart support is
the 20-day moving average at $7.90, which we are just above; resistance is the
Upper Bollinger Band at $8.30, which we are have pulled back from after testing
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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