DTN Midday Grain Comments 10/16 11:12
Wheat Higher at Midday
Quiet mixed trade at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is flat with the Dow down 20. The dollar index is 20
lower. Interest rate products are mixed. Energies are firmer with crude up
$0.60. Livestock trade is mixed with cattle leading. Precious metals are mixed
with gold up $7.10.
Corn trade is 1 to 3 cents lower with harvest pressure and disappointing
news on the ethanol front after the close adding pressure along with overbought
conditions but we have held support on the early test so far. Harvest will
remain slow but should show progress through the end of the week before wetter
weather returns to the east. The weekly ethanol report is expected to show
slightly higher production and steady stocks, but the biofuels support plan
doesn't contain as much support as hoped with ethanol futures and RIN's
breaking sharply yesterday and fading further this morning. Basis remains flat
to weaker with anticipation of more inbound bushels soon. South American corn
planting but is running behind normal. Weekly crop progress showed conditions
at 55% good to excellent, and 15% poor to very poor, with 96% dented vs. 100%
on average, 73% mature vs. 92% on average, and 22% harvested vs. 36% on
average. On the December contract support is at the 10-day at $3.91 which we
are testing overnight, then the 20-day at $3.84, and resistance the upper
Bollinger Band at 4.03.
Soybeans are 1 to 3 cents lower with trade still chopping around the upper
end of the range with overbought conditions and harvest pressure battling
improved nearby demand. Meal is $0.50 to $1.50 lower and oil is narrowly mixed.
Crush margins remain good with the month crush report coming in 10 million
bushels below expectations yesterday. The real is back to the low end of the
range vs. the dollar yet again. Bean basis is should see pressure as combines
roll through midweek before rains return. South America should make more
progress this week and into the second half of the months with some weather
issues remaining and planting pace solidly behind. Weekly crop progress had
conditions edge higher to 54% good to excellent, and 14% poor to very poor,
with 85% dropping leaves vs. 94% on average and harvest at 26% vs. 49% on
average. On the November chart support is the 10-day at $9.25 with the upper
Bollinger Band at 9.45, and the spike high at 9.45 3/4 as resistance.
Wheat trade is 1 to 5 cents higher with good buying showing up during the
day session. The Chicago/Kansas City December spread is 88 cents with choppy
action continuing with mostly steady to slightly wider. Remaining spring wheat
will likely not be cut at this point. The corn/HRW spread has widened back to
30 cents from 13 cents at the recent low, working wheat back out of rations.
Export action continues to be dominated by Black Sea origin. Weekly crop
progress showed 65% planted same as average, with 41% emerged vs. 40% on
average. Spring wheat harvest remained stalled at 94%. The December Kansas City
chart support is the $4.07-4.11 area where the 10,20, and 50-day moving
averages are clustered with the upper Bollinger Band at 4.22 as resistance,
then the 4.27 3/4 recent high.
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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