DTN Midday Grain Comments 03/02 10:57
Corn, Soybeans and Wheat All in the Green Midday
Corn is 6 to 8 cents higher, soybeans are 14 to 16 cents higher and wheat is
10 to 14 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 110 points. The U.S.
Dollar Index is 0.15 weaker. Interest rate products are lightly firmer.
Energies are flat with crude up $0.05. Livestock trade is weaker. Precious
metals are mixed with gold up $3.50.
Corn trade is 6 to 8 cents higher at midday with firmer spread action as
trade pushes off the overnight test of support and traders looking for
short-term demand improvement. Ethanol production should continue to rebound
with trade looking for better margins into the second quarter as spring driving
season commences with rising Brazil ethanol values likely to support U.S.
exports. Trade will continue to look for further export-sale confirmations with
175,000 metric tons of corn sold to Japan for new crop. Basis should remain
sideways short term as warmer weather will help improve movement. Double crop
planting in Brazil is well underway as well but behind the usual pace. On the
May contract resistance is the 20-day at $5.47, which we are just below at
midday, with the lower Bollinger Band at $5.32 as support that we bounced off
Soybeans is 14 to 16 cents higher at midday with firmer spread action
turning into fresh buying during the day session. Brazil's harvest progress and
Argentina weather is still in focus. Meal is $2.00 to $3.00 higher and oil is
0.30 cent to 0.40 cent higher. Basis will likely remain flat at strong levels
with slower movement as the export program winds down and a bigger focus is on
crush margins, with oil and meal both advancing Tuesday. Brazil should remain
rainy in the short term for most with shipments building upstream. Argentina is
seeing broadly drier trend. The May chart has resistance at the upper Bollinger
Band at $14.21, with support the 20-day at $13.83.
Wheat trade is 10 to 14 cents higher at midday with trade working to bounce
back from the broad Friday and Monday selling. Weather concerns are still at
the forefront in the Northern Hemisphere. The dollar is just below 91 points on
the index, getting back to the upper end of the range ,with further
consolidation at the upper end of the range needed to weigh on trade, but we
have struggled to sustain these levels. The Plains should see warmer weather,
bringing the crop closer to exiting dormancy soon with some dry pockets
persisting, but spotty light rains possible across the Plains. KC is at 30-cent
discount to Chicago; Minneapolis is at a 21-cent discount with mixed action so
far. KC May chart support is the lower Bollinger Band at $6.10, with resistance
the 20-day at $6.35b which have edged back above at midday.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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