DTN Midday Grain Comments 03/06 11:27
All Grains Higher at Midday
Good export sales and outside market support have us higher at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 70. The
interest rate products are lower. The dollar index is 42 lower. Energies are
mixed with crude down $0.60. Livestock trade is mixed with cattle lower and
hogs higher. Precious metals are higher with gold up $8.
Corn trade is up 4 on new crop and up 7 on May at midday; trade is near the
daily highs and we printed new highs for the move. Weekly export sales were
above expectations at 1.5 million tons of old and 164,500 tons of new, the
major buyers were Japan, over 500,000 tons, and Mexico over 400,000 tons. The
overnight trade was lower prior to the release of the weekly sales numbers. On
the chart the 200-day at $4.79 1/2 was the highest major moving average, which
we surpassed on Tuesday and have not looked back so far. The 200-day is support
now and the $5-$5.02 area is the next notable resistance. The USDA will
release the March World Agricultural Supply and Demand Estimates Monday
morning. The trade is expecting a 1.488-billion-bushel carryover versus the
1.481-bb number last month. The range of estimates is 1.431 to 1.656. The world
carryover is expected to be down by 1 million metric tons to 156.3 million
metric tons due to slight decreases in South American production.
Soybean trade is up 7 to 17 cents at midday, meal is up $1 to $3 and bean
oil is up 80 points. A weak dollar is supporting trade on the grain floor along
with a positive weekly export sales report. The soybean sales were 772,700 tons
of old crop and 256,000 tons of new. Meal sales were good at 232,800 tons and
bean oil also good at 16,900 tons. The trade is expecting the USDA to lower the
carryover on the monthly report on Monday morning. Brazilian production is
expected to be down around 2 million tons and Argentina down around a half
million tons. Chart resistance for this afternoon is at $14.45 on the May
contract; the midday market is around a dime below it, but the morning high was
Wheat trade is 1 to 3 higher at midday on the May contracts. Weekly export
sales were okay at 556,100 tons of old crop and 44,400 tons of new. The market
liked the fact that sales were better than the previous week with prices
higher. The weather looks improved without any additional cold treats in the
near term for U.S. winter wheat but moisture continues to look limited. The
hard red winter wheat areas are in the roughest shape. The March Supply and
Demand report has the trade looking for a steady world carryover with the
183.7-million-ton February number. The domestic carryover is expected to be at
570 million tons versus 558 million tons last month, the range of estimates is
549 million to 615 million bushels. On the chart, the May Chicago 10-day at
$6.20 is support, resistance is at the 200-day at $6.65.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Trading Advisor
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