DTN Midday Grain Comments 10/31 11:17
Corn, Wheat Lower at Midday
Nearby beans are a little better otherwise grain trade is weaker at midday
with wheat leading the path lower.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are sharply higher with the Dow up 195. The
interest rate products are higher. The dollar index is 81 higher. Energies are
lower with crude down $0.80. Livestock trade is mixed. Precious metals are
lower with gold down $30.
Corn trade is 3 to 5 cents lower at midday with some early two sided trade
ahead of the month end and weekend. Weather remains open for harvest to advance
in the near term, while South America is generally expected to see improved
planting pace, but overall acres are the bigger question with margins very poor
for the fringe areas. Ethanol production should remain elevated with margins
positive but seeing further pressure from the rising corn price and sliding
crude. December chart support is the 10-day moving average at $3.60, with
resistance the recent high at $3.81, then the $3.98 40% retracement level after
that. Trade should see a weaker trend into the close of the day ahead of a
harvest weekend, but we remain in-line for a fifth-straight higher weekly close.
Soybean trade is narrowly mixed at midday with active two sided trade at
midday. Meal is $4 to $5 higher and oil is flat to 10 points higher. Trade will
likely remain volatile as the nearby meal shortages should start to ease with
more beans coming through to be crushed and logistics catching up, as well
better movement of beans from farmers' hands to users. South America should see
better moisture in most areas to support crop progress in the near term. On the
January soybean chart the 100-day moving average is up at $10.82 which is the
next resistance level up if the rally can be sustained, while the 10-day moving
average at 10.01 is the first support level, with the 20-day at $9.78 the next
level up after that.
Wheat trade is 10 to 14 cents lower at midday with the sharply firmer dollar
and lack of support from the row crop trade. The dollar has firmed with easing
wrapping up in the US, and picking up in Europe and Japan. There should be
better rains for the eastern winter wheat growing areas in the near term, while
the west continues to struggle. The KC December contract is back below the
50-day and 10-day which could spark chart selling going into the weekend. The
demand picture needs to improve to support the bull argument here. Wheat
appears to have found a low in late September but the October rally / bounce
stalled over a week ago.
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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