DTN Midday Grain Comments 10/18 11:22
Corn, Soybean Futures Higher; Wheat Mixed
Corn futures are 2 cents higher at midsession; soybean futures are 2 to 4
cents higher; wheat futures are mixed.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market has been mixed with the Dow down 30 points at midday.
The U.S. Dollar Index is 6 points higher. Interest rate products are mixed.
Energies are higher with crude up .28. Livestock trade is mixed with cattle
lower and hogs higher. Precious metals are mixed.
Corn futures are 2 cents higher at midday with a mixed 7-cent range
overnight up to midday. There has been light follow-through buying after the
nice turnaround on Thursday and Friday last week following the negative monthly
WASDE numbers that came out last Tuesday which gave us pressure into Wednesday.
Farmer selling on strength during harvest is expected to limit the upside.
Ethanol margins remain good with higher energy prices; crude oil was up another
$1 this morning after moving above $81 last week. Export news needs to remain
good to support the rally. The trade is expecting harvest progress to be 53% to
58% on the USDA Crop Progress report Monday afternoon. The storm system that
came across the country last week was friendly, but likely caused some very
light yield losses and delays. This week looks open for good progress. On the
December contract, we have resistance at the 20-day moving average at $5.29
with the $5.06 3/4 low this past week first support then the September low at
Soybean futures are up 2 to 4 cents at midday after mixed to mostly lower
action overnight. Meal is mixed at midday with bean oil 60 points higher.
Short-term chart momentum was up after the close last week, so it was no
surprise to see some chart buying Monday morning, but it seems to be running
out of steam. The futures were already lower in the big picture for 2021 going
into the October USDA WASDE report last Tuesday, so the trade acts like the
slightly negative news was priced in. The market will want to see good demand
news from now to the November WASDE if we are going to confirm some type of
harvest low. Beans dropped roughly $3 from the June high to the low on
Wednesday with follow-through after the negative USDA report. A 40% correction
would be up around $13 on nearby, with a one-third correction closer to $12.80.
That area may be an upside chart target for technical longs without any real
friendly weather info out of South America. Fundamentally, we are two-thirds
through harvest and the yields seen, along with USDA number, has the market not
thinking a rally back up near the 2021 highs makes sense without some bigger
weather issue in South America. On the November soybean chart, support is the
recent low at $11.84 3/4 with resistance at the $12.48 20-day moving average.
Wheat futures are mixed at midday across the three exchanges. Wheat was
mostly firmer last week following the friendly USDA numbers. KC was a nickel
higher; Minneapolis was up over 20 cents with new highs for the move and
Chicago was unchanged on the week. The light dollar strength this morning and
on Friday has given wheat some outside market resistance to higher prices.
Plains' weather looks to push planting forward with progress listed at 60%
complete last Monday, which is in line with the average pace. The wet weather
this past week was good for the crop even if some of the last third of the
winter wheat could be planted slightly late. Minneapolis continues to have the
friendly fundamentals; when that is priced in will remain a big question for
wheat the rest of 2021. KC December chart support is at the 20-day moving
average at 7.29 with resistance at the Oct. 4 high of $7.64.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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