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DTN Grain Midday: Soybeans, Wheat Move Lower

Ernst Undesser
By David Fiala DTN Contributing Analyst January 11, 2018

DTN Grain Midday: Soybeans, Wheat Move Lower

©Debra L Ferguson Stock Images

Corn is mixed today, with soybeans and wheat lower.

CORN

Corn trade flat to a penny higher at midday; the daily range has been just over 2 cents. The firmer energy prices are boosting blender margins, with ethanol futures edging slightly higher. The weekly export sales were soft at 437,700 metric tons. The USDA announced 132,000 metric tons sold on the daily wire to unknown. Corn basis and carry remains fairly steady with carry decreasing in the cash market vs. the futures market in many areas.

Cold weather will likely slow ethanol output in the near term. Livestock efficiency should struggle with the very cold spells and changing weather that is okay for feed demand in the bigger picture. CONAB pegged Brazilian corn production at 92.3 million metric tons, up just slightly.

Looking ahead to the January World Agricultural Supply and Demand Estimates (“WASDE”) as well as the Quarterly Grain Stocks report: the average guess is for production to be at 14.557 billion bushels with a carryout at 2.414 billion, and Dec. 1 stocks at 12.143 billion. Slightly lower than the past estimates, but no major change.

The 2017 US Corn yield is expected to be at 175.2 bpa versus 175.4 on the November report. The world carryover is expected to be down around 1 million tons from the 204.1 million metric ton December USDA number.

On the March chart support is the $3.46 1/2 contract low. Resistance is at the 20-day moving average at 3.50 1/4 then the 50-day at $3.54.

SOYBEANS

Soybean trade is 2 to 4 cents lower with trade firming back from new lows this morning. Meal is $2 to $3 lower and oil is 10 to 20 points lower. South American weather is keeping the same basic forecast coming forward with mixed weather in Argentina and Brazil.

Basis and carry remains mostly sideways. The export wire has been more active this week with another 132,000 metric tons announced as sold on the daily wire.

The USDA report is expected to come in at 4.427 billion production, stocks at 3.181 billion bushels, and carryout at 472 million bushels. CONAB came in for Brazil at 110.4 million metric tons of production on 3.2% more acres, generally on the lower end of expectations.

Weekly export sales were soft at 607,400 metric tons of beans, -1,600 of oil, and 209,300 of meal. On the March, support is the new low at $9.50 scored this morning, and resistance the 10-day at $9.63.

WHEAT

Wheat trade is flat to 3 cents lower at midday with trade continuing to hover just below the next round of resistance with the usual overnight pull back being seen and firming trade into midday. The current shot of cold area shouldn’t be as threatening but the plains remain dry, while Russia has been warmer than normal, with minimal snow cover in case of a cold stretch.

The dollar fallen below 92 on the index with the general trend remaining down. Report expectations are for wheat stocks at 1.849 billion bushels, and carryout at 959 million bushels, and planted acres of 31.307 million acres of winter wheat.

The weekly export sales were disappointing at 71,500 metric tons. On the March KC contract, chart support is the 10-day at $4.34, with the 100-day at $4.43 as the next level of resistance.

General Comments

U.S. stock market indices are higher at midday with the Dow futures up 100 points. The interest rate products are higher. The dollar index is 46 lower. Energies are higher with crude up 1.00. Livestock trade is lower. Precious metals are mixed with gold 2.70 higher.

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Ernst Undesser
By David Fiala DTN Contributing Analyst January 11, 2018