DTN Midday Grain Comments 02/19 11:03

DTN Midday Grain Comments 02/19 11:03

Grains Lower at Midday

Early gains out of the holiday give way to broad selling during the day
session with wheat the downside leader again.

By David Fiala
DTN Contributing Analyst

General Comments

The U.S. stock market indices are mixed with the Dow near unchanged. The
interest rate products are weaker. The dollar index is 27 points lower.
Energies are firmer to narrowly mixed. Livestock trade is mixed with cattle
leading and hogs limit lower. Precious metals are firmer with gold up $18.00.


Corn trade is 2 to 3 cents lower with early gains fading with wheat trade
providing spillover pressure to start the week. The second crop in Brazil is
being planted in good condition for now. Planting is heading past the halfway
point with early rains looking to be good for germination. The energy complex
is maintaining recent gains to support ethanol a little more in the near term
with better seasonal action getting close. Weather is still limiting driving
for now with ethanol margins lower this week. Corn basis should firm again with
more weather disruptions. The weekly export inspections were decent at 941,811
metric tons. On the March chart, trade has support at the recent $3.71 1/4 low,
with the lower Bollinger Band at $3.72 3/8. Resistance is still clustered at


Soybean trade is 3 to 6 cents lower at midday with trade holding just above
$9.00 as trade talks resume in the U.S. this week. Meal is $1 to $2 lower, and
oil is narrowly mixed. South America weather should maintain the recent pattern
in the coming days. Brazil's harvest is moving along, and drier weather is
forecast in Argentina. Crush margins remain strong with meal holding $300 a ton
or better still, with January crush remaining strong. Trade talks will continue
in the U.S. this week with some progress scored this week, according to most
sources, and the March 1 deadline looming. Weekly export inspections were
decent at 1.031 million metric tons. On the March chart, resistance is now the
moving averages clustered at $9.13-9.15, which we just below, and then the
$9.01 support level from the early session lows, which is also the 100-day
moving average.


Wheat trade is 9 to 13 cents lower. Winter wheat is holding up slightly
better with firmer intra-month trade still showing, while the spring wheat
spreads have moved a nickel wider. The U.S. has seen better export business
lately, but world prices have followed the U.S. selloff the last couple of days
with European action stabilizing on Monday before selling returned. The dollar
remains near the upper end of the range but is reversing today. Cold weather is
expected to keep some stress on the Plains in the near term, with winter
wanting to hang around. Weekly export inspections were disappointing at 357,131
metric tons. On the March KC chart, support is low at $4.67 with resistance the
10-day at $4.91.

David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala


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