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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 

   Follow him on Twitter @davidfiala

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