DTN Midday Grain Comments 10/20 11:06
Grains Lower at Midday
Early gains gave way to lower trade across the board at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is higher this morning with the Dow up 90 points. The
interest rate products are lower. The dollar index is 38 higher. Energies are
higher with crude up $0.20. Livestock trade is mixed. Precious metals are lower
with gold down $6.50.
Corn trade is 2 to 4 cents lower at midday with early gains giving way
toward a test of the lower end of the range with wheat and soybeans adding
spillover pressure. Ethanol margins are under a little bit of pressure this
morning with ethanol futures moving lower, while blender margins have improved.
Basis should see harvest pressure, while carry remains at wide levels with
steady trade this week. Weather looks to remain open and better this week for
drying corn with some weekend rains expected for the central and eastern Corn
Belt. Corn moisture has been one of the biggest near-term concerns as it has
stayed stubbornly high in some areas, keeping the harvest focus on soybeans.
The daily wire had two export sales with 125,000 metric tons going to Spain,
and 120,000 metric tons to unknown. On the December chart support is at the
$3.42 1/2 low with resistance at the $3.54 50-day moving average.
Soybean trade is 2 to 6 cents lower at midday with early strength
evaporating as selling picked up with broader harvest pressure. Meal is $2.50
to $3.50 lower, and oil is 30 to 40 points higher. South American weather
forecasts continue to show an uptick in moisture for northern Brazil in the
extended forecast with the wetter areas drying out, which should boost planting
progress into next week. Harvest should be well past the halfway point now,
with rains potentially slowing progress this weekend. USDA announced 198,000
metric tons of soybeans sold to China on the daily wire. On the November chart,
trade is above all the major moving averages, with the 200-day at $9.75
support, with resistance the recent high at $10.03.
Wheat trade is flat to 4 cents lower at midday with early buying fading yet
again today with the broader commodity weakness today. The dollar is moving
more range bound in the near term after rallies and breaks have failed with
today having trade toward the upper end of the range. U.S. exports have been
slowed lately as Black Sea origin continues to dominate world movement.
Australia will see more focus coming forward, as well, as the growing season
progresses with some flood damage concerns in South America. Planting progress
should pick up substantially for winter wheat this week, along with warmer
weather supporting emergence with insurance dates coming into play in some
areas. On the December KC, support is the lows at $4.20 with the 10-day at
$4.31 holding on the test this morning with further resistance at the 20-day at
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Advisor.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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