DTN Midday Grain Comments 10/22 11:06
Beans, Corn Higher at Midday
Corn is 3 to 4 cents higher, soybeans are 8 to 10 cents higher, and wheat is
4 cents lower to 3 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow flat. The dollar index is 30
points higher. Interest rate products are lower. Energies are firmer with crude
up $0.90. Livestock trade is lower. Precious metals are weaker with gold down
Corn trade is 3 to 4 cents higher with spread trade continuing to firm with
December-March down to below 2 cents. The export wire was quiet again today but
action indicates more sales will likely show up soon with weekly export sales
strong 1.83 million metric tons. Ethanol margins remain under pressure with
corn values as ethanol retains its premium to unleaded. Basis will likely
remain solid with rains slowing harvest along with the upfront demand. On the
December contract resistance is the fresh high at $4.19 with support the 20-day
Soybean trade is 7 to 10 cents higher after early weakness with spread trade
and meal action continuing to carry trade forward with meal leading. Meal is
$6.50 to $7.50 higher and oil is 50 to 60 points higher. The ral remains in
the lower end of the range with planting progress in Brazil likely to pick up
with plentiful rains short term, with Argentina still holding onto soybean
supplies as an inflation hedge with another crush plant idled by mechanical
issues via explosion. Basis remains strong as we continue to work to max out
our logistics capacity to ship the needed export bushels. Weekly export sales
remain strong at 2.23 million metric tons, 321,900 of meal, and 37,000 of oil.
The daily wire showed sales of 152,404 metric tons to Mexico, and 132,000 to
unknown. The November chart has resistance at the fresh high at 10.85 1/4 with
support the 20-day at 10.40.
Wheat trade is 5 cents lower to 1 cent higher with winter wheat trade weaker
with better rains expected on the Plains short term, with little change to
world forecasts yet. The ruble action continues to favor Russia a bit in the
export markets but their domestic prices are now elevated with growing winter
kill concerns, along with too much rain in Australia although production
estimates remain elevated. South Korea secured 130,000 metric tons of white
wheat on the daily wire. Middle East buyers are becoming more active with
tenders as well. Kansas City is at a 57-cent discount to Chicago with spreads
backing off the recent highs, while Minneapolis is back to 40 cent discount
with firmer action and a sharp reversal this week. Rains look to be
concentrated to the eastern growing areas in the short term. Weekly export
sales were a bit softer at 367,500 metric tons. Kansas City December chart
resistance is the fresh high at $5.79 1/2, and support is the 20-day at $5.30.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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