DTN Midday Grain Comments 03/26 11:19
Grain Trade Mostly Lower at Midday
Trade is lower across the board at midday led by wheat.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower at midday with the Dow futures down
25 points. The interest rate products are higher. The dollar index is 1 point
higher. Energies are higher with crude up $1.10. Livestock trade is mostly
lower. Precious metals are mixed with gold up $7.00.
Corn trade is 3 to 4 cents lower at midday after trading a few higher
overnight. May moved above the 100-day and highest major moving average, at
$3.95 1/2, picked up some buy stops going to $3.97, before sinking mid-morning.
A conclusive push back through that level up to the two-month high at $4, if it
would occur, should trigger additional buy stops and bigger short covering. For
now the momentum has stalled and we are posting a light reversal at midday.
Chart support is at $3.86, the 20-day. New crop trade has been holding back
around the February insurance average level, at $4.15, at midday. Firmer
futures could help to push corn acreage towards the 89 million acre level. The
weekly export sales were disappointing at 435,000 metric tons. The average
trade guesses for the March Planting Intentions and March 1 Stocks have the
corn acreage at 88.7 million acres with a range of 87-89.75 versus 90.6 last
year. The USDA March 1 Quarterly Stocks estimate is 7.610 billion bushels with
a range of 7.46-7.8 billion versus 7.008 a year ago. The reports due out on
Monday historically give us one of the biggest report days of the year.
Soybean trade is 3 to 6 cents lower at midday with meal $1 to $2 lower and
oil flat to 10 points higher. With 2015 South American harvest moving toward
completion and supplies available they should keep their prices below US
prices. A front month inverse continues to persist in meal, indicating strong
up from demand. The anticipation of larger soybean acres will continue to cap
upside for now. The lower prices in general could lose major crop acreage
overall, which is why even confident bears respect possible fundamental news
changes on the USDA major report dates. The weekly export sales were better
than expected at 505,800 metric tons of old crop, 220,200 of new crops, 224,300
of meal, and 22,400 of oil. The USDA also announced 280,000 metric tons of new
crop soybeans sold to unknown. The average trade guess for the USDA March
Planting Intentions is at 85.9 million acres with a range of 83-88 million
versus 83.7 million a year ago. Soybean quarterly stocks are expected to be at
1.345 billion with a range of 1.273-1.4 billion versus 994 million a year ago.
The May 10-day moving average at $9.73 is nearby support with the 20-day at
Wheat trade is 12 to 17 cents lower at midday with the firmer dollar and
easing weather concerns encourage liquidation of recent long positions.
Southern Plains weather will have to be watched more in coming days with the
moisture favoring the eastern growing areas this week. Export sales were
disappointing at 102,300 of old crop, and 79,400 of new. On the KC May chart we
have slipped below the 10-day moving average at $5.55 with the 20-day at $5.46
as support right now. The average trade guess for the all wheat planted number
is at 55.8 million acres with a range of 54.9 to 56.8 versus 56.82 million
acres a year ago. The March 1 wheat stocks are expected to be at 1.14 billion
versus 1.057 billion a year ago.
David Fiala is a DTN contributing analyst and the president of FuturesOne
and a registered Trading Adviser.
David Fiala can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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