DTN Midday Grain Comments 09/23 11:06
Grains Trending Higher at Midday
Spring wheat and soybeans lead at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow 25 higher. The dollar index is
10 points higher. Interest rate products are weaker. Energies are mixed with
crude up $0.10. Livestock trade is firmer. Precious metals are firmer with gold
Corn is 2 to 4 cents higher at midday with trade again challenging the upper
end of the recent range with support from harvest delaying rains, and stronger
soybean action. Rains will slow early harvest in many areas in the short term,
but temps should remain warm. Corn basis is expected to continue to see
pressure as harvest gets going. Ethanol futures are slightly lower with
improved margins holding on, with unleaded and ethanol both slightly higher
this morning. The weekly export inspections were disappointing at 233,993
metric tons. Weekly crop progress should show steady conditions with maturity
catching up some with the recent heat. On the December contract support is at
the 20-day at 3.65 with the upper Bollinger Band above trade at 3.77.
Soybeans are 11 to 13 cents higher at midday with support from weather and
trade optimism to regain the late week losses with talk of China securing 10
more cargos for December, but we remain below the recent highs. Meal is $2.50
to $3.50 higher, and oil is 5 to 15 points lower. Crush margins remain good,
but the bull argument needs a positive export story besides sporadic sales to
China. Economically U.S. export competitiveness is improving but the real has
moved back to the lower end of the range. Bean basis remains flat in the
interior. South America will be watched for a turn to wetter near term weather
to get planting underway. For the week, export inspections were OK at 922,550
metric tons. Weekly crop progress will likely show steady conditions, with
maturity gaining a little. On the November chart are back above the moving
averages clustered in the $8.87 range, with the upper Bollinger Band remaining
resistance at $9.06.
Wheat trade is 1 cent lower to 14 cents higher with spring wheat leading on
late harvest problems and quality concerns. The Kansas City/Chicago spread is
74 cents, down 3 cents to start the week. The corn/HRW spread is hanging around
the 35-40 cent area. So Kansas City wheat is competitive on the world market
but we need to see the business and more buyers to move the board out away from
our lows with feed competitiveness still in place for the southern plains.
Winter wheat planting should expand more this week, but the market is not
providing incentives to plant. Weekly crop progress should show planting
remaining below the average pace, and spring wheat harvest nearly complete.
Weekly export inspections were inline at 476,173 metric tons. The December
Kansas City chart support is at the 20-day at $4.00 1/2, with resistance at the
upper Bollinger Band at 4.15, which we are just below.
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 him on Twitter @davidfiala
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