DTN Midday Grain Comments 01/22 11:02
All Grains Lower at Midday
Corn is 7 to 8 cents lower, soybeans are 19 to 21 cents lower, and wheat is
12 to 16 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 150. The dollar index is 5
higher. Interest rate products are firmer. Energies are weaker with crude down
$0.60. Livestock trade is higher. Precious metals are mixed with gold down
Corn trade is 7 to 8 cents lower at midday with broad commodity risk off
trade this a.m. encouraging selling while spread trade remains mostly steady.
Ethanol margins will remain poor with soft demand, and with limited relief in
the cash market short term with the weekly report showing production 4,000
barrels per day higher, and stocks down 64,000 barrels. Basis has remained
fairly sideways. Weekly export sales were strong again at 1.44 million metric
tons. On the March contract, support was the gap area at $5.17, which we are
trading just below at midday and bounced from with the 20-day at $4.96 below
that, with the next level up the contract high at $5.41 1/2.
Soybeans are 21 to 23 cents lower at midday with trade testing support
levels as spread trade weakens despite fresh export sales of 136,000 metric
tons to China again today. Meal is $5.50 to $6.50 lower and oil is 55 to 65
points lower. Basis will likely remain flat with crush likely to take
precedence over shipping in coming weeks with crush margins narrowing overall
and new crop seeing more interest in recent export bookings. Brazil should
catch rains short term with very early harvest underway, with Argentina action
mixed. Weekly export sales were very strong at 1.82 million metric tons of old
crop, 831,000 of new crop, meal was 468,500 metric tons, and oil 52,300. The
March chart has support at the 20-day moving average of $13.46 which we have
tested so far with resistance the old support area around $13.85.
Wheat trade is 12 to 16 cents lower at midday with trade following the lead
of the row crops so far, with Chicago seeing the most pressure so far with
intramonth spreads relaxing. The dollar remains above 90 on the index with
light buying in risk off trade. The Plains are expected to see limited moisture
with cold scares remaining limited for now. Kansas City is at 21-cent discount
to Chicago with the pattern of narrower overnight trade continuing, with
Minneapolis at -21 as well. Weekly export sales remain a bit soft at 329,600
metric tons. Kansas City March chart support is the 20-day at $6.10, and
resistance is the upper Bollinger Band at $6.51.
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