DTN Midday Grain Comments 01/25 10:49
Corn, Soybeans, Wheat Futures Higher at Midday
Corn futures are 7 to 8 cents higher at midday Tuesday; soybean futures are
5 to 6 cents higher; wheat futures are 5 to 18 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 350 points. The U.S.
Dollar Index is 25 points higher. Interest rate products are weaker. Energies
are firmer with crude up 1.50. Livestock trade is mixed with hogs leading.
Precious metals are firmer with gold up 6.00.
Corn futures are 7 to 8 cents higher with flat spread action as trade works
to consolidate at fresh highs with Russia/Ukraine tensions and wheat strength
continuing to lead. Ethanol margins will continue to be squeezed by tepid
short-term demand with trade expecting another stocks build this week. Trade
will continue to look for further sales confirmation on the daily wire; no
sales reported today. Basis should remain rangebound to slightly weaker in the
short term with weather likely to slow movement. Trade will continue watching
South American weather as we head toward second-crop planting and development.
On the March contract we have support at the 20-day moving average at $6.03
then the fresh high at 6.29 1/4 as resistance, which we are testing at midday.
Soybean futures are 4 to 6 cents higher at midday with flat spread action as
trade bounced off $14.00 nearby after the volatile start to the week with trade
digesting South American rains and nearby demand. Meal is flat to $1.00 lower
and oil is 40 to 50 points higher. Basis remains mostly flat in the short term.
Crush margins remain solid with future renewable diesel demand likely to keep
good support under oil going forward, while meal has struggled with the $400
level in recent days. Early harvest is underway in South America, likely to
further crimp U.S. export competitiveness in February. No fresh sales showed up
on the daily wire, with better demand likely needed to push things with the
improved weather. On the March soybean chart, we have resistance at the fresh
high of $14.29 1/2, with trade back above the 20-day moving average at $13.83
Wheat futures are 5 to 18 cents higher with KC action taking the lead at
midday with political concerns continuing to push the winter wheats; spring
wheat has tacked more sideways. The dollar remains squarely rangebound in the
short term as well but is pressing back towards the upper end a bit. Plains
weather looks to remain challenging with conditions declining further while
political fears ramp up again with little change in the Russia/Ukraine
situation besides U.S. recalling diplomats on Sunday. Spring wheat is weaker
versus. Chicago dropping the premium to 1.36 on the March, with KC at an
18-cent premium in flat action. KC March chart support is the 20-day moving
average at $7.92, which we moved above; resistance is the Upper Bollinger Band
at $8.38, which we are testing at midday.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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