DTN Midday Grain Comments 02/25 10:53
Grains Tumble Into Midday Thursday
Corn is 7 to 9 cents lower, soybeans are 14 to 16 cents lower and wheat is 6
to 12 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow down 180 points. The U.S.
Dollar Index is 0.36 lower. Interest rate products are weaker. Energies are
flat with crude unchanged. Livestock trade is mixed. Precious metals are weaker
with gold down $22.00.
Corn trade is 7 to 9 cents lower at midday with new crop closer to steady as
spreads continue to weaken, albeit at the upper end of the range as March is
headed into delivery. Ethanol production should continue to rebound with trade
looking for better margins into the second quarter. Trade will continue to look
for further export-sale confirmations with the daily wire remaining quiet
Thursday. Shipping pace should recover further this week with weekly sales
disappointing at 453,300 metric tons of old crop and 145,900 of new crop. Basis
should remain sideways short term. Double crop planting in Brazil is well
underway as well but behind the usual pace. On the May contract, support is the
20-day at $5.47 with the upper Bollinger Band at $5.61 as resistance.
Soybeans is 14 to 16 cents lower with trade turning lower after
disappointing export sales and light cancellations, and spread trade is
weakening at midday. Meal is $2.00 to $3.00 lower and oil is 0.20 cent to 0.30
cent lower. Basis will likely remain flat at strong levels with slower movement
as the export program winds down and a bigger focus is on crush margins, as
well as improved weather for moving remaining soybeans. Brazil should catch
rains short term for most as harvest is underway but behind the usual pace.
Export shipments are picking up steam, with Argentina action trending warmer
and drier over the next few days. Weekly export sales soft at 167,800 metric
tons of old crop and 70,800 of new crop; 160,200 metric tons of meal and 4,400
metric tons of oil. The May chart has resistance at the fresh high at $14.45
3/4, with support the 20-day at $13.78.
Wheat trade is 6 to 12 cents lower with spring wheat leading as trade works
to consolidate recent gains with support from weather and the dollar. The
dollar broke below 90 points on the index overnight and is near contract lows.
The Plains should see warmer weather, bringing the crop closer to exiting
dormancy soon. KC is at 25-cent discount to Chicago, with Minneapolis at
26-cent discount and mixed action so far. Weekly export sales were poor at
167,700 metric tons of old crop and 14,800 of new crop. KC May chart support is
the 20-day at $6.36, with resistance the fresh high at $6.62.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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