DTN Midday Grain Comments 01/21 10:51
Corn Futures Higher at Midday; Soybeans Lower; Wheat Mixed
Corn futures are 2 to 3 cents higher at midday Friday; soybean futures are
10 to 12 cents lower; wheat is 5 cents lower to 2 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow up 100 points. The U.S. Dollar
Index is 10 points lower. Interest rate products are firmer. Energies are mixed
with crude down .20. Livestock trade is mixed with hogs leading. Precious
metals are weaker with gold off 10.00.
Corn futures are 2 to 3 cents higher at midday with two-sided action so far.
There was a test of the post-harvest highs at $6.17 before trade faded slightly
with strong spread action continuing. Ethanol margins will continue to be
squeezed by tepid short-term demand. Export sales rebounded solidly to 1.09
million metric tons (mmt) of old crop, and 105,000 metric tons (mt) of new crop
with 247,800 mt sold to unknown for old crop. Basis should remain rangebound to
slightly weaker in the short term with weather likely to slow short-term
movement. Trade will continue watching South American weather as we head
towards second crop planting and development. On the March contract we have
support at the 20-day moving average of $6.02, then the upper Bollinger band at
$6.16, which we are just below at midday.
Soybean futures are 10 to 12 cents lower at midday with trade bouncing back
from 20 lower early. Volatile trade is likely to continue with demand and South
American potential still in focus. Meal is $6.50 to $7.50 lower and oil is 20
to 30 points higher. Basis remains mostly flat in the short term with some
processors starting to widen. Crush margins remain solid with future renewable
diesel demand likely to keep good support under oil coming forward. Early
harvest is under way in South America, likely to further crimp U.S. export
competitiveness in February with short-term forecasts still showing relief for
some areas. Weekly export sales showed improvement at 671,000 mt old crop;
528,000 mt of new crop; 314,900 mt of old meal; 201,700 of new meal; and oil at
30,700. The daily wire also showed 132,000 mt of old crop to China. 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 $13.79 support.
Wheat futures are 5 cents lower to 2 cents higher at midday with trade
fading back from the $8.00 area on the winter wheats. Spring wheat is
consolidating above $9.00 with trade waiting for further political direction
and Northern Hemisphere weather. The dollar remains squarely rangebound in the
short term as well. Plains weather looks drier with a little snow cover out of
the last system, while temps continue to fluctuate, keeping stress intact with
other Northern Hemisphere weather concerns fading for the moment while
political fears ramp up again with little change in the Russia/Ukraine
situation. Weekly export sales were improved at 380,600 mt of old crop and
72,000 mt of new crop. Spring wheat is firmer vs. Chicago, moving the premium
to $1.57 on the March, with KC at a 12-cent premium in firmer action as well.
KC March chart support is the lower Bollinger band at $7.37 with the 20-day
moving average at $7.98, which we are just below at midday.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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