DTN Midday Grain Comments 09/02 10:43
All Grains Lower at Midday
Wheat is leading trade lower across the board at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are higher with the Dow futures up 155 points. The
interest rate products are higher. The dollar index is 40 points higher.
Energies are lower with crude down $1.20. Livestock trade is mixed with cattle
lower and hogs higher. Precious metals are mixed with gold down $6.
Corn trade is 2 to 4 cents lower at midday with trade grinding along in the
lower end of the recent range. Warmer weather is expected to continue this
week, which should move maturity with harvest expected to become more
widespread in the next couple of weeks. Ethanol margins have improved but crude
oil will need to find support to bolster blender margins into fall. The weekly
ethanol production report showed production down .42%, stocks up 2%, and
gasoline demand 2.7% higher, and there were light ethanol imports for the first
time in awhile. The USDA monthly report is due out next Friday which will be
the next major news trade this week should be active with some direction from
the outside markets. On the December chart support is at the low from last week
at $3.65 and then the contract low at $3.57. Resistance is at the $3.78 20-day
moving average then the $3.86 high printed last week.
Soybean trade is 5 to 10 cents lower with outside market pressure
overwhelming the early commercial buying. Meal is $1 to $2 lower and oil is 40
to 50 points lower. Beans are starting to carve out a range in the $8.60 to
$8.90 area with trade in the middle to lower part of that range this morning.
The weather is still important to determine how the crop will finish out but
few worries are around with dry pockets as we head towards the finish. On the
November soybean chart support is at the contract low of $8.55 is support with
resistance at $8.88 the previous low then the 20-day at $9.08.
Wheat trade is 7 to 11 cents lower at midday with the stronger dollar and
flat row crop trade adding to the defensiveness this morning with the Kansas
City contract making new lows again. Weak fundamentals and chart pressure will
continue to limit upside, but some profit taking vs. shorts is probably needed
in the near term, but further shorts continue to be added for now. Spring wheat
harvest will be wrapping up soon which should take some of the pressure off the
Minneapolis contract. Chart resistance for the December Kansas City contract is
at the $4.89 10-day moving average. Support is at the $4.71 fresh contract low
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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