DTN Midday Grain Comments 05/05 11:23
All Grains Lower at Midday
Trade is lower across the board at midday after early strength.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher, with the Dow up 30. The interest
rate products are mixed. The dollar index is 55 points higher. Energies are
higher with crude up 1.10. Livestock trade is higher. Precious metals are mixed
with gold up $4.
Corn trade is 3 to 4 cents lower at midday with the strong dollar and
disappointing exports dragging trade lower after early strength. The
significant chart item to note here is July closed below the 20-day for the
second day in a row; this is a negative chart item, if further weakness
surfaces today it could accelerate selling. The July 50-day and 100-day are in
between $3.72 1/2 and $3.74, they are the lowest major moving averages and we
testing that area at midday. We should expect buy stops below there. Weather
gives us a few planting delays but as a whole we both have a good planting
window and warmer conditions will be ideal. Ethanol margins should be supported
if the crude oil rally is sustained this morning. The weekly export sales were
disappointing with 769,300 metric tons of old crop, and 60,500 of new. On the
July chart resistance is at the $3.81 20-day then the $3.86 1/2 200-day with
the 50-day and 100-day, noted above, our notable support levels. Monthly USDA
numbers are due out next Tuesday, expected so show heavy supply side items.
Soybean trade is 7 to 12 cents lower after trade failed to hold early
strength, triggering additional selling. Meal is $4 to $5 lower and oil is
narrowly mixed. The trend remains higher despite volatile action this week but
a poor finish today would turn the chart lower. The 10-day and highest major
moving average now at $10.26, but we have edged below that at midday, which
could trigger more selling later in the day. The market will start to focus on
saturated areas where corn planting could get late and move to beans, otherwise
for the start of May the planting progress is a fairly neutral market item.
Increased acres from corn could become more of a factor due to our recent price
rise. The weekly export sales were strong at 815,800 metric tons of old crop,
430,000 of new crop, 152,700 of meal, and 10,000 of oil. On the July soybean
chart the 10-day moving average is support with resistance at the $10.57 high
printed on Monday.
Wheat trade is 5 to 10 cents lower at midday with trade setting back along
with the row crops as the wheat tour continues to find good yield potential.
Supplies are big, but prices are low, so the risk reward in shorts in case of
some weather issue favors the long side versus new shorts at the new contract
lows made this morning. The Kansas wheat tour will continue through the end of
the week, with a mix of disease and strong yield potential found so far. World
weather remains fairly benign, although the Canadian prairie has been pretty
dry this spring. The weekly export sales were soft again at 178,400 metric tons
of old crop, and 140,000 of new crop. The July Kansas City chart has resistance
at the $4.73 20-day with support at the recent and contract lows printed this
morning at $4.50 1/2.
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
Copyright 2016 DTN/The Progressive Farmer. All rights reserved.
Your local weather forecast from DTN can be sent to your email every morning free through DTN Snapshot