DTN Midday Grain Comments 10/21 11:18
Soybeans Lead Grains Higher at Midday
Grain trade is firm across the board at midday, but off the highs.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 150 points.
The interest rate products are higher. The dollar index is 32 lower. Energies
are mixed with crude up $0.20. Livestock trade is mixed. Precious metals are
higher with gold up $7.
Corn trade is 5 to 6 cents higher at midday with short covering and light
chart buying noted. Ethanol margins have stabilized in recent days, and remain
positive but well off the recent highs with blender margins seeing increase
pressure over the last week. Harvest progress should advance substantially this
week, but farmers are still struggling with high moisture corn in many areas.
Yield reports remain strong for the most part, and harvest pressure should
increase heading toward Friday. Harvest progress could surpass the 50% level on
the weekly report next Monday. Soybeans have been getting higher priority but
as some wrapup their bean harvest; corn will be in full swing by the weekend.
The weekly crop progress report showed corn 93% mature vs. 94% on average, and
31% harvest vs. 53% on average. On the December chart the $3.47 10-day moving
average is support, with the 20-day at $3.37 below that; resistance is the
$3.58 level which is the one month high printed last week. The 100-day up at
$3.90 is the next upside major moving average. Trade has been flirting on both
sides of the $3.48 50-day the past week.
Soybean trade is 12 to 14 cents higher at midday with commercial buying and
light short covering noted by funds. Meal is $10 to $11 higher and oil is flat
to 10 points lower. Harvest should advance rapidly on soybeans this week, with
the weather forecast hinting at only limited potential delays. South American
weather will continue to be a potential issue with the forecasts lacking
consistency for now but at least some near-term moisture in many areas. The
weekly progress report showed 91% dropping leaves in line with the average, and
53% harvested vs. 66% on average. On the November chart beans are back above
the 10-day moving average at $9.48, with the 20-day moving average at $9.36 the
next level of support. Resistance is the high from last week at $9.78 1/2 which
is just below the $9.82 50-day moving average. Harvest pressure should
intensify this week for beans to help limit upside.
Wheat trade is 4 to 9 cents higher at midday across the three exchanges at
midday despite the firmer dollar. Spillover support from row crops and light
chart buying is noted for the higher midday action. The more open weather
pattern should allow wheat drilling to catch up in Kansas this week. The
overall crop should be able to establish itself early; lingering drought
conditions on the Southern Plains could raise concerns quickly if the current
dry pattern persists. Australian weather continues to raise questions with
dryness over a good chunk of their wheat belt, and the Russian crop has some
trouble spots early but overall is in ok shape. The weekly progress report
showed 76% planted vs. 77% on average, and 56% emerged vs. 50% on average. On
the December Kansas City chart, wheat has support at the 10-day at $5.91, with
resistance at $6.15, which was the high from last week.
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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