DTN Midday Grain Comments 02/08 11:32
All Grains Lower at Midday
Outside market weakness has grain trade lower with few changes expected on
February report on Tuesday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow futures down 315
points. The interest rate products are sharply higher. The dollar index is 18
points lower after trading higher initially. Energies are lower with crude down
60 cents. Livestock trade has hogs mixed and cattle at or near limit down.
Precious metals are sharply higher with gold up $35.
Corn trade is 2 cents lower at midday in slow action. Outside markets are
pressuring corn but limited fresh selling interest at 3-week lows is around
ahead of the USDA report. The weekly export inspections were low at 438,560
tons. The USDA monthly World Agricultural Supply and Demand Estimates (WASDE)
are due out at 11 a.m. tomorrow. The average trade guess is for the domestic
corn carryover to come in around 1.810 billion bushels versus 1.802 on the
January report. World ending stocks are expected to be at 208.3 versus 208.94
on the January report. With virtually no changes expected a modest 50-100
million bushel surprise could give the market some direction and excitement
tomorrow. For today the daily range has only been 4 cents with the midday
market just a penny above the low. On the March chart we slipped below the
$3.67 50-day moving average on Friday and below the 20-day at $3.65 1/2
overnight which are now our two nearby resistance points. Support to note is
$$3.60 then the $3.48 1/2 contract low.
Soybean trade is 3 to 4 cents lower at midday due to outside market
weakness. Meal is fractionally higher and bean oil is down 55 points. With the
Dow futures down over 300 points and crude lower outside markets are keeping
buyers away for beans. The weekly export inspections were good for beans at
1.1723 million metric tons which has limited downside. Looking to tomorrow the
average trade guess for the February USDA domestic carryover is for it to come
in at 445 million bushels versus 440 on the January report. The world carryover
is expected to be at 78.95 versus 79.28 million metric tons on the January
report. Expectations are for a small reduction in South American production of
around half a million tons between Argentina and Brazil. Any unexpected modest
changes on the report could give us a bigger move. On the March soybean chart
support is at $8.63 then the $8.52 early January low. Resistance is at the
$8.76 1/2 20-day moving average.
Wheat trade is 3 to 6 cents lower across the three markets at midday with
light bearish momentum. Kansas City inched to a new contract low on Friday and
has extended down today. Minneapolis and Chicago have not traded to new lows,
but contract lows are their nearby chart support at this juncture. The weekly
export inspections were neutral at 398,216 tons. Looking to tomorrow morning
the average trade guess for the February USDA domestic carryover is 947 million
bushels versus 941 million on the January report. The global carryover is
expected to be at 231.5 million metric tons versus 232.04 seen last month which
was a new high for the crop year. On the March Kansas City chart the low Friday
at $4.51 1/2 was a quarter cent below the contract low; this is now nearby
resistance, then the 10-day at $4.64. The new contract low at $4.46 1/4 is
current chart support to note at midday.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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