DTN Midday Grain Comments 04/09 10:43
Corn, Wheat Higher Prior to WASDE
Corn is 3 to 4 cents higher, soybeans is 2 to 3 cents lower and wheat is 11
to 15 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow up 80 points. The U.S. Dollar
Index is 0.20 higher. Interest rate products are mostly lower. Energies are
mixed with crude down $0.05. Livestock trade is mixed with hogs leading.
Precious metals are weaker with gold off $13.00.
Corn trade is 3 to 4 cents higher at midday as new crop is keeping pace with
spreads flat and buying interest remaining solid ahead of the WASDE report
coming at 11 a.m. CDT. New highs are being scored in May and December trade by
just a little bit. Ethanol margins should remain range-bound with driving
demand still improving while rising corn values limit upside as the energy
complex rally stalls. The WASDE report is expected to show domestic carryout
expected at 1.396 billion bushels, but the market will also be focusing on
weather with rains working through much of the Corn Belt and new crop
projections waiting until next month. Corn basis should remain sideways short
term with ethanol and export movement needing to maintain the recent
improvements in pace. Double-crop progress in Brazil looks to have mixed
weather for most, with early growth seeming to be OK for now. On the May
contract, chart resistance is the contract high at $5.85 3/4, with the upper
Bollinger Band at $5.76 3/4 as support then the 20-day at $5.55.
Soybeans is 3 to 4 cents lower trade with new crop still losing ground to
corn, and mostly range-bound trade still intact ahead of the report. Meal is
$2.00 to $3.00 lower and oil is 0.20 cent to 0.30 cent higher. Oil and meal
have both struggled to regain momentum in recent days with oil trying to lead
again. The old-crop soybean balance sheet will be one of the main items watched
on the WASDE Friday morning with carryout expected to be at 119 million
bushels. South America is expected to continue harvest progress in Brazil with
little overall weather change short term. The May soybean chart has resistance
at the upper Bollinger band at $14.42, then the contract high at $14.65, which
we did not take out on the surge last week, with the 20-day nearby support just
below the action at $14.12 and then the $14.00 area.
Wheat trade is 11 to 15 cents higher at midday with broad buying of all
wheat classes and spillover support from corn ahead of the report. The
downtrend in the dollar should keep encouraging short covering while wheat
looks more competitive in feed rations. Weather in the Plains should encourage
growth with moisture light for many and mostly seasonal temperatures. KC has
widened to a 54-cent discount to Chicago with Minneapolis 9 cents above
Chicago. KC May on the chart has support at the 20-day at $5.78 that we moved
above Thursday, with $6.00 the next level of resistance.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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