DTN Midday Grain Comments 09/20 10:54
Grains Mixed at Midday
Spring wheat leads mixed trade at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow 40 higher. The dollar index is
35 points higher. Interest rate products are weaker. Energies are mixed with
crude up 0.50. Livestock trade is mixed to mostly lower. Precious metals are
firmer with gold up $4.
Corn is flat to 2 cents higher with trade still struggling to extend the
upper end of the range but finding light buying during the day session. Weather
remains a short-term non-issue with warm temps and some wet weather in areas to
move along late crop development and maturity. Corn basis is expected to
continue to see pressure with harvest underway in more areas, and more coming
soon. Ethanol futures are slightly lower with improved margins holding on, but
unleaded has eased lower this a.m. The export wire has remained quiet this week
with the rally. On the December contract support is at the 20-day at 3.65 with
the upper Bollinger Band above trade at 3.77.
Soybean trade is 3 to 5 cents lower with trade staying within the recent
range with little fresh news. Meal is narrowly mixed and oil is 30 to 40 points
lower. Crush margins remain good, but the bull argument needs a positive export
story with last week's sales to China concluded. Economically U.S. export
competitiveness is improving which may be just as important as trade
negotiations to get some business done, although the real is testing the lows
again today. Bean basis remains flat in the interior. South American currencies
remain weak as planting season draws closer with dry weather to start,
potentially delaying things early on. On the November chart we near support at
the 100-day at $8.86 and the upper Bollinger Band at $9.05, and the 200-day at
9.13 as resistance.
Wheat trade is 1 cent lower to a dime higher with Minneapolis trade leading
on the quality concerns. The Kansas City/Chicago spread is 77 cents, down 7
cents from the high this week. The corn/HRW spread is hanging around the 35-40
cent area. So Kansas City wheat is competitive on the world market but we need
to see the business and more buyers to move the board out away from our lows
with feed competitiveness still in place for the southern plains. Winter wheat
planting should expand more this week, but the market is not providing
incentives to plant. The December Kansas City chart support is at the 20-day at
$4.00 1/2, with resistance at the upper Bollinger Band at 4.15, which we are
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 him on Twitter @davidfiala
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