DTN Midday Grain Comments 09/29 11:16
Grain Mostly Higher in Quiet Pre-Report Trade
Grain trade is mostly higher in quiet pre-report action.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower and Dow futures are down 50. The
interest rate products are lower. The U.S. dollar index is 6 lower. Energies
are higher with crude up $.40. Livestock trade is mixed with cattle mostly
higher and hogs lower after Friday's Hog and Pig report. Precious metals are
higher with gold up $3.90.
Corn trade is a penny higher in quiet midday trade. Harvest progress this
weekend and early this week is picking up. Rains look to slow harvest progress
at midweek before a more open pattern resumes. The weekly export inspections
were a little soft at 601,825 metric tons. The weekly crop condition and
progress report is expected to show conditions unchanged, with maturity and
harvest running slightly behind the five-year average. On the December chart
resistance is at $3.35 3/4. Support is now $3.20 with another new contract low
printed at $3.22 on the December. The quarterly Hog and Pig report was slightly
supportive for corn with higher feed implications for 2014-15 feed usage.
Looking to Tuesday morning when the USDA will release the September quarterly
Grain Stocks report, final wheat and revised soybean production number. The
average trade guess for the corn September 1 quarterly stocks (which is also
the old-crop ending stocks number) is 1.185 billion, which is 4 million above
the September USDA WASDE number. The range of estimates is 1.02-1.35 billion.
Soybean trade is 5 to 8 cents higher with light profit taking vs. shorts at
midday. Meal is mixed and oil is 35 to 45 points higher. On the November chart
support is $9 with the lowest major moving average, the 10-day, noted
resistance at $9.44. South American planting is just getting underway with
increased acres expected. So the fundamental picture is firmly and historically
bearish with heavy global and domestic supply side data and market
expectations. The weekly export inspections were good at 687,191 metric tons.
The weekly crop progress report is expected to show steady conditions and
maturity slightly behind the five-year average. This year the significance of
the September 30 stocks report is muted due to the expectations of a huge
record 2014 crop. The average trade guess for the September USDA quarterly
stocks is 126 million bushels with a range of 100-150 million. The final
soybean crop revision is expected to come in at 3.362 billion with a range of
3.29-3.4 billion versus the September 3.289 billion USDA number.
Wheat trade is narrowly mixed at midday with early gains giving way after
the dollar firmed off the early lows. The dollar has backed away from the highs
and a trend reversal would make wheat more competitive on the world market. The
Southern Plains look to have decent weather for field work and planting in the
near term. The weekly export inspections were good at 573,647 metric tons. The
weekly progress report should show spring wheat harvest nearly complete, and
winter wheat planting 2% to 5% ahead of normal. Wheat is oversold on the charts
with limited chart support to mention other than the contract lows. First
resistance on the Kansas City December contract is at the 10-day moving average
at $5.67. Looking to Tuesday the average trade guess for the September
quarterly wheat stocks is 1.88 billion bushels with a range of 1.7-1.98
billion. The domestic 2014 all wheat production estimate is 2.04 billion with a
range of 2-2.075 billion bushels.
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
Copyright 2014 DTN/The Progressive Farmer. All rights reserved.
DTN offers additional daily information available free through DTN Snapshot – sign up