DTN Midday Grain Comments 02/27 11:30
Grains Higher at Midday
Corn and wheat are near the daily highs at midday, beans higher but soft.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower at midday with the Dow futures down
20 point. The interest rate products are mixed. The dollar index is 5 lower.
Energies are higher with crude up $0.75. Livestock trade is mixed with cattle
lower and hogs mostly higher. Precious metals are higher with gold up $6.
Corn trade is near the daily highs at midday up 4 cents; the early low was 4
cents lower. We are around 15 cents from the three-week low scored on
Wednesday. Outside markets are fairly neutral Friday and the limited
follow-through selling Thursday has led to some short covering today. No major
news has been seen nor should be expected next week. The market illustrates
this with our strongly sideways chart pattern. The February trading range was
around 25 cents and we should finish in the middle dime range of it today. The
May 2015 low of $3.73 3/4 is key long-term support. The market is back above
the 100-day, at $3.90, at midday. Resistance is up at the $3.99 50-day.
Fundamentally, the market should view a drop below the 2015 low would
discourage planted area and tighten the 2015-16 balance sheet estimates; a
rally above the February high may find acres.
Soybean trade is 2 to 6 cents higher at midday, meal is $1 lower and bean
oil is 100 higher. The bean oil gave beans a boost today, but we are off the
highs by 6 to 8 cents at midday. The bean oil strength, if it continues, should
support beans this afternoon. Logistic issues in Brazil will continue to be
watched for disruptions with trucker strikes slowing harvest, and opening up
the potential for losses in the field. If the strikes can be resolved, Brazil
should reach the halfway point soon. The soy complex does have great demand,
but we also have record global supply that will limit upside on bounces. On the
May soybean chart, support is at the $10.11 10-day then the $9.95 20-day with
resistance at the $10.38 high printed today.
Wheat trade is 3 to 11 cents higher across the three exchanges at midday.
Spillover support from corn and now some chart buying has the momentum up at
midday. The dollar is continuing a strong sideways pattern flirting with the
multi-year highs which limits export interest. Strength today is tied to lower
than expected inflation numbers as well as the spillover support from the row
crops. Snow cover on parts of the southern plains will protect wheat with the
pending cold snap with additional snowfall expected over the next few days for
much of Kansas. The cold is generating some uncertainty which appears to a
least limit selling interest today ahead of the weekend. On the May KC chart
the market is below all major moving averages, but we are close to the $5.43
10-day with the 20-day at $5.50 key resistance.
David Fiala is a DTN contributing analyst and the president of FuturesOne
and a registered Trading Adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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