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DTN Midday Grain Comments 02/06 10:51
Corn, Wheat, Soybean Futures All Lower at Midday
Corn futures are 2 to 3 cents lower at midday Monday; soybeans are 10 to 12
cents lower; wheat futures are flat to 8 cents lower.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
Corn futures are 2 to 3 cents lower at midday Monday; soybeans are 10 to 12
cents lower; wheat futures are flat to 8 cents lower. The U.S. stock market is
weaker with the Dow off 45 points. The U.S. Dollar Index is 70 points higher.
Interest rate products are weaker. Energies are weaker with crude off .40 and
natural gas flat. Livestock trade is mixed with cattle leading. Precious metals
are mixed with gold up $3.00.
CORN:
Corn futures are 2 to 3 cents lower with softer spread action with early
strength fading back to support during the day session with little fresh news
overall and a soft overall commodity environment. Ethanol margins have support
from natural gas while blender margins tighten again with the recent fade in
unleaded values, but spring blends will boost margins in the coming weeks. Crop
development will continue to be watched with drier weather short-term in
Argentina, and early double-crop planting in Brazil to expand in coming days;
but it has fallen off the ideal pace for now, adding support. The daily export
wire showed life with 200,000 metric tons (mt) split between old and new crop
to Mexico while Japan secured 118,000 mt. Weekly inspections were off a little
at 480,205 mt. Basis has stabilized in the west with above-average action
holding up overall. On the March chart, support is at the $6.74 20-day moving
average, which we are testing at midday with the upper Bollinger Band at $6.93
the next round up, which we have faded from last week with a fresh high for the
move just below that still at $6.88 3/4.
SOYBEANS:
Soybean futures are 10 to 12 cents lower at midday with rangebound action
continuing short-term while product action and South American weather continue
to provide direction, helping us to fade back toward support levels. Meal is
$6.50 to $7.50 lower and oil is 35 to 45 points lower with crush margins still
strong as meal fades back from the $500.00 area. Weekly export inspections were
solid at 1.830 million metric tons (mmt) pushing us ahead of last year's pace.
Trade will be looking for the Brazil export pace to pick up soon as harvest
expands, but it remains slower than usual amid showers, while Argentina will be
watched for further deterioration short-term. Basis remains mostly sideways
near-term. March chart support is at the $15.14 20-day moving average, which we
remain just above, with the Upper Bollinger Band at $15.49.
WHEAT:
Wheat futures are flat to 8 cents lower with KC trade leading as trade fades
again from the upper end of the range again with negative spillover from row
crops and outside markets. The Southern Plains will warm up with the more
significant precipitation remaining to the east, with short-term Black Sea
dryness while exports slow on logistical challenges. Matif wheat values are
firmer as well, helping support action. Weekly export inspections were OK at
536,355 mt. On the chart, KC March has support at the 20-day moving average at
$8.51, which we are solidly above, with the recent high at $8.95 as resistance
with the Upper Bollinger Band at $8.97.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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