DTN Midday Grain Comments 03/27 11:12
Wheat Up at Midday; Beans, Corn Down at Midday
Row crops are lower at midday, wheat slightly higher.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher at midday with the Dow futures up
25 points. The interest rate products are lower. The dollar index is 28 points
lower. Energies are lower with crude down $1.30. Livestock trade is mostly
higher. Precious metals are lower with gold down $7.70.
Corn trade is 1 to 2 cents lower in quiet midday trade. Overall basis has
held up this week to advance farmer movement; there is some softening where
farmer movement has been good. Ethanol margins have shown some improvement but
remain firmly in the slightly positive to slightly negative range, which we
have seen the past few months. May contract chart support is at $3.86, the
20-day with resistance at $4. New crop trade has been holding back around the
February insurance average level, around $4.15 with our daily range of
$4.13-$4.17. Firmer futures could help to push corn acreage towards the 89
million acre level. The average trade guesses for the March Planting Intentions
report due out Tuesday is 88.7 million acres with a range of 87-89.75 versus
90.6 last year. The USDA March 1 Quarterly Stocks average trade 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 Tuesday historically give us one of the biggest report
days of the year. Trade will likely be quiet and choppy into the weekend.
Soybean trade is 5 to 10 cents lower at midday with meal $1 to $2 lower and
oil 60 to 70 points lower with continued selling pressure lingering on the
market. With 2015 South American harvest moving toward completion and supplies
available, they should keep their prices below U.S. prices. A front-month
inverse continues to persist in meal, indicating strong short-term demand. This
should also support the domestic crushers staying active in the near term. 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 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 $9.71 is nearby support with the 20-day at $9.88
resistance. Trade may see some additional long liquidation late, going into the
Wheat trade is 3 to 8 cent higher at midday with cold air across the plains
raising some concerns, but the reversal of the dollar and localized moisture
this week capping upside. On the Kansas City May chart, we have slipped below
the 20-day moving average at $5.44, and finishing above that area today will be
key to holding on to some chart momentum, and we are above that level at
midday. 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 what stocks are expected to be at 1.14 billion versus 1.057
billion a year ago. Look for wheat trade to struggle to hold gains into the
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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