DTN Midday Grain Comments 02/22 11:34
Corn and Wheat Higher at Midday
Corn and wheat are firmer at midday in slow trade, soybeans are lightly
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow futures up 10 points.
The interest rate products are higher. The dollar index is 10 points higher.
Energies are mixed with crude down .80. Livestock trade is mixed with cattle
leading. Precious metals are lower with gold down $4.70.
Corn trade is 1 to 2 cents higher at midday with trade continuing to grind
around in the recent range. Ethanol margins remain poor, but spring driving
season continues to grow closer giving some optimism with the weekly report
delayed until tomorrow, with futures up slightly this morning. Double crop
planting in Brazil will continue to expand in coming days. Basis remains weak,
but better bids have surfaced in some areas into March. The USDA outlook forum
this week will shine more light on expected 2017 acre figures. Support is at
the $3.68 20-day and $3.67 200-day which we are tested yesterday, with
resistance now at the $3.72 10-day followed by the $3.80 high.
Soybean trade is 1 to 4 cents lower at midday with overnight strength giving
way to a weaker day session again. Meal is $1 to $2 lower and oil is flat to 10
points higher as it tries to come off multi-month lows. Crop size expectations
remain strong for Brazil with harvest gaining speed, but the strong Brazilian
real remains the bigger story for export competition. The slide in oil values
had hurt crush margins, which has helped to keep basis weak. On the March
soybean chart, support is now at the $10.18 200-day and resistance at the
$10.44 20-day, with trade falling below the 50-day at $10.35.
Wheat trade is flat to 4 cents higher at midday with trade finding better
support this morning after the recent setback with weather concerns potentially
increasing with the unusually warm weather set to give way to colder action.
The firmer dollar will limit upside, but it remains overall in the lower side
of the post-election range. The warm stretch will continue to raise concerns
about breaking dormancy. Kansas, Oklahoma, and Texas caught some rains over the
weekend, but western Kansas remains drier. Protein spreads remain stable and
generally are narrowing slightly. On the March KC contract support is at the
$4.50 200-day. Resistance is at the 7-month high at $4.74 1/2 which was printed
on Thursday with the 10-day at $4.57 just above the market.
Live Cattle are called 20 to 40 higher with trade expected to chop around
with little fresh news expected today, with feeder cattle called 30 to 50
higher as the cash index remains solidly above the market. The cutout was soft
on Tuesday with choice down .90 at 191.89 and select down .59 at 189.81. Cash
trade was mostly in the $119 to $120.50 area last week which should put early
asking prices around $122-123 with smaller showlists. On the April Live Cattle
chart support is now at the $115.20 20-day, then the $110.74 200-day.
Resistance is at the $116.30 recent high.
Lean hog trade is called 30 to 50 lower with increasing ready numbers and
weaker cutout values will keep some pressure on trade to start the week. The
cutout sagged a dollar yesterday moving below $85 with the belly led rally
continuing to fade. The chart and fundamentals are pretty sideways, with demand
and packer margins having held up well so far through winter. On the April
Chart support is the 20-day at 69.90. Resistance is at the $72.65 eight-month
high reached last week.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow Fiala on Twitter @davidfiala
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