DTN Midday Grain Comments 02/27 11:01
Mixed Grains at Midday
Corn is 5 to 6 cents lower, soybeans are 1 to 3 cents higher, and wheat is 3
to 7 cents lower.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 650. The dollar index is
39 lower. Interest rate products are weaker. Energies are weaker with crude
down $1.60. Livestock trade is sharply lower. Precious metals are mixed with
gold up $7.80.
Corn trade is 5 to 6 cents lower at midday with trade seeing broad weakness
again as virus fears continue to roil the market. Ethanol margins remain tight
with more pressure on blender margins with the pressure in the energy complex.
Corn basis remains steady, with little change in recent days but more open
weather should help movement along with March basis contracts coming due this
week. Weekly export sales were on the lower end of the recent range at 864,300
metric tons of old crop, and 113,600 metric tons of new. On the March contract
support is the lower Bollinger Band and the fresh lows at $3.66 marked today,
with resistance at the lower Bollinger band at $3.73, which are just below.
Soybean trade is 1 to 3 cents higher with soybeans coming sharply off the
lows with meal leading the complex. Meal is $3.00 to $4.00 higher and oil is 10
to 20 points lower. South America remains a bit off normal harvest pace but
issues overall are limited with Argentina export tax changes the biggest news.
The Brazilian ral remains very cheap as well hurting U.S. export
competitiveness near term with new lows scored this week. New crop soybeans
will need to gain vs. corn to provide an acreage incentive ahead of planting in
the U.S. with positive action so far this week. Weekly export sales were soft
at 393,300 metric tons of old crop, 22,100 of new, meal was 157,500 of meal,
and 5,600 of oil. The March soybean chart support is the lower Bollinger band
at $8.69, with resistance the 20-day at $8.85, which we are tested before
Wheat trade is 2 to 6 cents lower with spring wheat trade holding up the
best so far this a.m. Weather threats for the plains remain limited with mostly
warmer short-term weather after the recent rain and snow. KC is at an 85-cent
discount to Chicago, with choppy action so far while Minneapolis is back to a
25 cent discount as well, widening back from the early week action. Partial
condition reports Monday showed no major issues so far for the Plains states.
World export business has been quieter in recent days with weekly sales were
range bound at 381,300 metric tons of old crop, and 68,100 of new. The March
Kansas City chart support is $4.42 with resistance the lower Bollinger Band at
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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