DTN Midday Grain Comments 01/27 10:55
Soybean Futures Higher at Midday; Wheat Lower; Corn Mixed
Corn futures are narrowly mixed at midday Thursday; soybean futures are 11
to 15 cents higher; wheat futures are 5 to 12 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 485 points. The U.S. Dollar
Index is 75 points higher. Interest rate products are mixed. Energies are mixed
with crude off .10. Livestock trade is weaker with hogs the downside leader.
Precious metals are weaker with gold down 38.00.
Corn futures are narrowly mixed at midday with two-sided trade again at the
upper end of the range with firmer spread action returning. Ethanol margins
continue to deteriorate as stocks pushed to the highest levels since last May,
with short-term demand remaining soft. Trade will continue to look for further
sales confirmation on the daily wire with nothing hitting the wire today.
Weekly sales were solid at 1.4 million metric tons (mmt) of old crop, and
-165,000 mt of new. Basis should remain rangebound to slightly weaker in the
short term with weather likely to slow short-term movement in some areas. Trade
will continue watching South American weather as we head into second-crop
planting and development. On the March contract we have support at the 20-day
moving average at $6.05, then the fresh high at $6.31 as resistance, which we
Soybean futures are 11 to 15 cents higher at midday with two-sided trade
once again giving way to strong buying at midday with spread action firming and
meal leading the product complex. Meal is $6.50 to $7.50 higher and oil is 50
to 60 points higher. Basis is flat to weaker in the short term. Crush margins
remain solid with future renewable diesel demand likely to keep good support
under oil going forward, while meal has struggled with the $400 level in recent
days but has surged above it at midday. Early harvest is underway in South
America, likely to further crimp U.S. export competitiveness in February with a
more mixed forecast again into February. No fresh sales showed up on the daily
wire, with better demand likely needed to sustain fresh buying with the current
forecast. Weekly sales improved at 1.03 mmt of old crop, 202,800 mt of new,
330,100 mt of old meal, and -99,000 mt of new, with oil at 12,200 of old, and
-100 of new. On the March soybean chart, we have resistance at the fresh high
at $14.54, with trade well above the 20-day moving average at $13.90 support.
Wheat futures are 5 to 12 cents lower with spring wheat trade leading as
winter wheat gives back a little more of the early week gains but has bounced
back from the early weakness. The dollar is near new highs after the Fed
statement Wednesday. Plains weather looks a little drier in the short term with
the crop likely to stay dormant and some areas having better snow cover now.
Spring wheat is firmer versus Chicago, moving the premium to $1.27 on the
March, with KC at a 22-cent premium in firmer action. Weekly export sales were
a marketing year high at 676,600 metric tons (mt) of old and 60,000 mt of new.
KC March chart support is the 20-day moving average at $7.92, which we moved
above, with resistance the Upper Bollinger Band at $8.38, which we have pulled
back from after testing Wednesday.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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