DTN Midday Grain Comments

General Comments

The U.S. stock market indices are lower with the DOW futures down 170 points. The interest rate products are flat to lower. The dollar index is 70 points higher. Energies are lower with crude down 20 cents. Livestock trade is mostly lower. Precious metals are lower with gold down $3.

CORN

Corn trade is 2 cents lower in slow midday with futures sitting near the daily lows which are our weekly lows. The dollar is back up some and the stock market is weak. It appears money is moving out of the US and Europe with global economic concerns growing but nothing major appears to be going on at this juncture. The dollar action will be watched closely next week. The USDA monthly World Agricultural Supply and Demand Estimates ("WASDE") are due out on Tuesday. The average trade guess is for the domestic corn carryover to come in at 1.810 billion bushels versus 1.802 on the January report. World ending stocks are expected to be at 208.3 versus 208.94 on the January report. So very little change is expected on Tuesday, this sets us up for some reaction with even a small 25-50 million bushel surprise would be seen. On the March chart we slipped below the $3.67 50-day moving average with the 20-day at $3.65 3/4 nearby support which is also the lowest major moving average. Resistance is at the $3.73 3/4 high printed Tuesday then the 100-day up at $3.79 1/2.

SOYBEANS

Soybean trade is 3 cents lower at midday with outside market pressure alongside limited fresh news. Meal is $2 lower at midday and bean oil is 15 points higher. The weekly report showed a net reduction in sales yesterday which was negative for beans, but sales to-date remain good with many looking for a slight export increase on Tuesday. The South American weather story remains uneventful. The chart pattern remains strongly sideways which should lead to a quiet afternoon. Looking to Tuesday the average trade guess is for the February USDA domestic carryover to come in at 445 million bushels versus 440 on the January report. The world carryover is expected to be at 78.95 versus 79.28 million metric tons on the January report. Expectations are for a small reduction in South American production of around half a million tons between Argentina and Brazil. Any unexpected modest changes on the report could give us a bigger move on Tuesday. On the March soybean chart support is at the low printed last week at $8.67. Resistance is now at the $8.76 1/2 20-day moving average.

WHEAT

Wheat trade is 4 to 6 cents lower at midday due to chart pressure. The weekly export sales number yesterday morning was a marketing year low 66,200 metric tons supporting the bear argument, which is carrying into today. The average trade guess for the February USDA revised domestic carryover is 947 million bushels versus 941 million on the January report. The global carryover is expected to be at 231.5 million metric tons versus 232.04 seen last month which was a new high for the crop year. On the March Kansas City chart we are down challenging support at the contract low at midday. Resistance is at the $4.75 20-day moving average.

David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered trading adviser.
David Fiala can be reached at dfiala@futuresone.com
Follow David Fiala on Twitter @davidfiala

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