DTN Midday Grain: New Lows for Corn in Broadly Lower Trade

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Corn is 4 to 5 cents lower, soybeans are 5 to 6 cents lower, and wheat is 3 to 8 cents higher. Outside markets are mixed. U.S. stock market indices are firmer with the Dow 80 higher.

The U.S. dollar index is 18 points lower. Interest rate products are weaker. Energies are mixed with crude down $0.55. Livestock trade is sharply lower. Precious metals are mixed with gold $5.50 higher.

CORN

Corn futures are 4 to 6 cents lower at midday, with selling pressure returning after early stability. Ethanol margins remain under pressure again to end the week, which will likely continue until improvement is seen on blend rates and refinery waivers. ethanol futures are weaker, as well.

Weather remains a short-term nonissue with warm temps for many.

Corn basis remains mixed to weaker overall, with harvest approaching but still too far away in some areas with board prices low. The weather forecast does not indicate any near-term threats.

Export sales remain soft at -165,900 metric tons (mt) old crop, and 416,700 of new crop. On the December, nearby chart support is the $3.53 low with the lower Bollinger Band at $3.43 with resistance at the 10-day average of $3.65, with the 20-day next at $3.72.

SOYBEANS

Soybean futures are 4 to 6 cents lower after washing out Thursday on the back of increased South American production expectations and no concrete trade progress and spillover from corn.

Meal is $1.00 to $2.00 lower and oil is flat to 10 points lower. Crush margins remain positive overall, with oil staying towards the upper end of the range, and meal testing support again Friday. Basis remains flat overall.

The Brazilian real has found support this week versus the dollar, but remains near record lows with Argentina expected to favor bean production because of political considerations. The weather looks to be a short-term nonissue for soybeans as well, with maturity remaining the biggest concern.

Weekly export sales were decent at 69,400 mt old crop, 788,400 new crop, 68,500 of old meal, 158,600 of new, 3,100 of old oil. 9,500 of new oil. November chart support is at the lower Bollinger band at $8.53, with resistance the 10-day at $8.65 that failed to hold.

WHEAT

Wheat futures are 2 to 7 cents lower, with light selling after the Thursday gain with KC holding up the best so far. The KC/Chicago spread is at 72 in the middle of the recent range.

The corn/HRW spread is wider, back to 37 cents. KC wheat is now back to competitive on the world market, trading into feed rations with Russian exports still working to get moving in a bigger way.

Spring wheat harvest is trying to play catch up with the slow start in the Northern Hemisphere with difficulties lingering in many places. The weekly export sales were on the lower end of the range at 312,500 mt. December KC chart support is the new low at 3.80 with the first resistance the 10-day average at $3.96, and the 20-day at $4.02.

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

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