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DTN Midday Grain Comments 03/03 10:52
It's a Red Wednesday for Grains at Midday
Corn is 6 to 8 cents lower, soybeans are 8 to 11 cents lower and wheat is 2
to 10 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow up 140 points. The U.S. Dollar
Index is 0.06 higher. Interest rate products are weaker. Energies are firmer
with crude up $1.50. Livestock trade is firmer. Precious metals are weaker with
gold down $11.50.
CORN:
Corn trade is 6 to 8 cents weaker at midday with broad selling returning to
start the session after the Tuesday rebound, while new crop holds near the
upper end of the range. Ethanol production rebounded sharply with gains of
191,000 barrels per day and stocks down another 360,000 barrels. Trade will
continue to look for further export-sale confirmations as the wire is quiet
again Wednesday. Basis should remain sideways short term as warmer weather will
help to improve movement. Double-crop planting in Brazil is well underway, but
behind the usual pace. On the May contract resistance is the 20-day at $5.47,
which we failed to hold above Tuesday; the lower Bollinger Band is at $5.32,
which we remain just above.
SOYBEANS:
Soybeans are 8 to 11 cents lower at midday with spread action still strong,
which has helped to limit further downside Wednesday morning, while new crop
loses a little ground to corn. Meal is $4.00 to $5.00 lower and oil is flat to
0.10 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. Brazil should remain rainy in the short term for most, with shipments
building up steam and a record long line of ships to load; Argentina is
remaining mostly dry short term. The May chart has resistance at the Upper
Bollinger Band at $14.24, with support the 20-day at $13.87.
WHEAT:
Wheat trade is 2 to 11 cents lower with the Tuesday rebound fading again and
intramonth trade slightly softer with fresh news lacking otherwise. The dollar
is just below 91 points on the index, getting back to the upper end of the
range with further consolidation at the upper end of the range needed to weigh
on trade and choppy action returning this week. The Plains should see warmer
weather, bringing the crop closer to exiting dormancy soon with some dry
pockets persisting and spotty light rains possible across the Plains. KC is at
28-cent discount to Chicago and Minneapolis is at an 11-cent discount. KC May
chart support is the lower Bollinger Band at $6.12, with resistance the 20-day
at $6.35, which we have faded from overnight.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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