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DTN Midday Grain Comments 02/22 10:52
Grains Mixed at Midday
Row crops move sideways, with spring wheat the midday leader.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow 190 points higher. The
interest rate products are lower. The dollar index is 5 points lower. Energies
are mixed with crude 0.40 higher. Livestock trade is flat to slightly higher.
Precious metals are firmer with gold up $4.30.
Corn trade flat to 1 cent higher at midday in light two-sided action so far.
A 92-million-acre figure, up 3.35% year over year, as the USDA Outlook estimate
for 2019 US Acreage with a new crop carryout of 1.65 billion bushels has added
some light support this morning. South America progress will remain on track
for corn in the near term. The energy complex remains near the upper end of the
range, with ethanol futures reaching $1.36 with seasonal support starting to
develop more. Corn basis should firm again with more weather disruptions with
aggressive bids by some end-users with more focus on exporters with trade. The
export sales for the last six weeks were 6.06 million metric tons, towards the
upper end of the range of expectations. On the March chart trade has support at
the recent $3.68 1/2 low, the lower Bollinger Band at $3.70 7/8, with more
notable chart resistance clustered at $3.76-$3.78 which we have been tested but
failed to move through the last two days.
Soybean trade is narrowly mixed with trade holding support but not able to
extend further from the reversal earlier in the week. Meal is flat to $1.00
lower and oil is flat to 10 points lower. The USDA Outlook forum noted a 85
million acre number for 2019 planted acreage, down 4.7% from 2018 with carryout
at 845 million. South America weather should maintain the recent pattern in the
coming days with Brazil harvest moving along and drier weather in Argentina
with pod fill on going. Crush margins remain strong. Trade talks will continue
in the U.S. this week with some progress scored this week according to most
sources and the March 1 deadline looming, although there is more talk of an
extension with apparent good progress this week along with further Chinese
purchase commitments over a broad array of ag products expected to be confirmed
today. Export sales were 6.531 million metric tons of soybeans, 1.468 million
of meal, and 92,100 of oil. On the March chart resistance is now the moving
averages clustered at $9.09-9.14 which we testing this morning again, with
support at the lows from Wednesday at $8.93 with oversold conditions in place.
Wheat trade is 1 to 11 cents higher with Minneapolis trade leading again,
with the winter wheats still struggling to maintain momentum. US export
business will remain in focus with the delayed export sales at 3.457 million
metric tons, with most business done well above current market levels. The
dollar has remained flat after Fed guidance. The outlook forum had 47 million
acres of wheat with a 944 million bushel carryout. Cold weather is expected to
keep some stress on the plains in the near term with winter wanting to hang
around. On the March Kansas City chart, support is low at $4.49 1/4 with
resistance the 10-day at $4.75, with trade easing oversold conditions.
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
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.
No daily commentary available
March beans finished up 8 ½ , March corn up 4 ¾ , and March wheat up 5 ¾. News today about the Chinese pledging to buy large quantities of Ag products including corn and wheat rallied the markets. Beans were able to get back above the major moving averages before settling just below the 50 DMA at 911 ½. Corn found resistance at the 50 DMA but was able to settle above short term 10 day moving average. The market is getting excited about the possible trade deal and that there are some specific things being addressed. The two groups are working on a memorandum or understanding for a trade agreement (written agreement). As always, devil is in the details, exactly what, how much, and when is still up for debate. Initial numbers getting thrown around were that China would buy an additional $30B of US ag products. USDA released estimates for corn acres in 2019 to be 92M, Beans at 85M and wheat at 47M with no big surprises.