DTN Midday Grain Comments 01/19 10:58
Corn, Soybean, Wheat Futures Higher at Midday
Corn futures are 8 to 9 cents higher at midday Wednesday; soybean futures
are 21 to 23 cents higher; wheat futures are 20 to 25 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow off 40 points. The U.S. Dollar
Index is 20 points lower. Interest rate products are firmer. Energies are
mostly higher with crude up 1.75. Livestock trade is higher. Precious metals
are firmer with gold up 28.00.
Corn futures are 8 to 9 cents higher at midday with trade trying to
consolidate back over $6.00 nearby with spillover support from wheat and
soybeans and firmer spread trade. Ethanol margins will continue to be squeezed
by tepid short-term demand with production expected to slide further as demand
looks to remain soft in the short term with the weekly report delayed until
Friday. Basis should remain rangebound to slightly weaker in the short term
with weather likely to slow short-term movement. Trade will continue watching
South American weather as we head towards second-crop planting and development.
The daily export wire has been quiet this week. On the March contract, we have
support at the 20-day moving average at $6.01; the upper Bollinger band at
$6.13 is further resistance.
Soybean futures are 21 to 23 cents higher at midday with trade snapping back
to the middle of the recent range after rebounding from early selling Tuesday
as trade continues to weigh rains and forecasts for the dry areas of South
America along with broad spillover commodity support. Meal is $7.50 to $8.50
higher and oil is 130 to 140 points higher. Basis remains mostly flat in the
short term. Crush margins remain solid with future renewable diesel demand
likely to keep good support under oil going forward. The daily export wire was
quiet Wednesday. Early harvest in under way in South America, likely to further
crimp U.S. export competitiveness in February. On the March soybean chart, we
have resistance at the fresh high of $14.15, with trade back above the 20-day
moving average at $13.68 overnight with the lower Bollinger Band well below the
current action at $13.20.
Wheat trade is 20 to 25 cents higher at midday with oversold conditions and
political worries helping push trade back off the lower end of the range with
action heading back towards the $8.00 area nearby. The dollar is giving back a
bit of the rebound from Tuesday. Plains weather looks drier with a little snow
cover out of the last system, while temps continue to fluctuate, keeping stress
intact with other Northern Hemisphere weather concerns fading for the moment
while political fears ramp up again. Spring wheat is firmer vs. Chicago, moving
the premium to $1.42 on the March, with KC at a 5-cent premium in lightly
firmer action as well. KC March chart support is the lower Bollinger band at
$7.36 with the 20-day moving average at $8.00, just above the market.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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