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DTN Grain Midday: Wheat Hits 6-Month High

Ernst Undesser
By David Fiala DTN Contributing Analyst February 16, 2017

DTN Grain Midday: Wheat Hits 6-Month High

Wheat is the leader at midday with Chicago up a nickel and at six-month highs; corn is a penny lower after setting a new seven-month high!

 

 

CORN

Corn trade is a penny lower at midday with quiet action so far albeit a new seven-month high was printed at $3.80 on the nearby March contract. The daily range has been less than 4 cents. Trade will be watching to see if funds continue to pile in length going into the longer holiday weekend. Market bears are calling for some harvest pressure to start out of South America.

Ethanol futures are slightly lower at midday keeping pressure on the margins. This has not been a good week for ethanol margins with the deep drop early in the week, and firmer corn trade. The weekly export sales were ok at 783,500 metric tons of old crop corn, and 285,200 of new crop.

On the charts yesterday was the highest close since mid-July; that July high was at $3.87 1/2 on the March contract which is the next major chart resistance level. We did inch above the high yesterday up to $3.80 which is first resistance currently. Support is at the $3.71 10-day then the $3.68 20-day.

SOYBEANS

Soybean trade is 4 to 5 cents lower at midday which has us near the low of a near dime trading range. Meal is $1 to $2 higher and soybean oil is 40 to 50 points lower. The firmer Real continues to limit Brazilian export competitiveness which has been supportive for near term US demand.

The weekly export sales were good at 890,000 metric tons of old, 204,700 of new crop, 121,000 of meal, and 9,900 of oil. Outside markets are mixed, but the lower dollar does appear to be limiting downside here at midday.

On the March soybean chart we had the highest close in over a month yesterday and are above all major moving averages. As long as we can close above the 10-day the chart should be viewed as positive heading into Friday. March beans have support at the 10-day y moving average at 10.49. Resistance is at the $10.80 7-month high.

WHEAT

Wheat trade is seeing some corrective spread action at midday with Chicago up a nickel, Kansas City up 3 cents and Minneapolis down 4. But the higher trend overall remains in force with some new highs for the move here at midday. Some short covering may help Chicago and Kansas City wheat firm going into the holiday.

The warm stretch will continue to raise concerns about breaking dormancy early, with the more extended forecast showing potentially for a cold snap into early March for the western belt. The risk is keeping sellers away. The weekly export sales were pretty neutral at 569,100 of old crop and 19,500 of new.

On the March Kansas City contract support is at the $4.51 200-day then the $4.44 20-day. Resistance is at the 7-month high at $4.74.

General Comments

The U.S. stock market indices are lower with the Dow futures down 30 points. The interest rate products are higher. The dollar index is 60 points lower. Energies are lower with crude down 0.30. Livestock trade is mixed. Precious metals are higher with gold up $10.

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Ernst Undesser
By David Fiala DTN Contributing Analyst February 16, 2017