DTN Midday Grain Comments 04/20 11:53
Wheat Leads Grains Lower at Midday
Trade is lower across the board at midday with wheat the downside leader.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow futures down 165
points. The interest rate products are higher. The dollar index is 38 points
higher. Energies are lower with crude up 0.25. Livestock trade is lower.
Precious metals are mixed with gold down 8.50.
Corn trade is 4 to 6 cents lower at midday with trade slipping below the
$3.80 area ahead of May option expiration Friday. Fieldwork should expand in
some areas this week with drier pockets to the east with warmer temps expected
to wait until next week. Delays are expected to persist in Iowa and Minnesota.
The second-crop areas of Brazil look to remain on the dry side in the near term
as well. Ethanol futures have edged back over the $1.50 mark, boosting margins.
On the May chart, we are just below the 20-day at $3.82 3/8 with the 100-day at
$3.71 becoming support if we fade into the weekend.
Soybean trade is 4 to 8 cents lower at midday with trade sliding below
nearby support heading toward option expiration Friday. Meal is $2 to $3
higher, and oil is flat to 10 points lower, with meal values catching a bid
this morning. Oil is at the low end of the recent range. Crush margins remain
positive overall, but they have narrowed. The recent pattern in South America
should remain intact near term, allowing for greater progress in Brazil
harvesting, with values remaining elevated for Brazilian producers to encourage
harvest selling in the near term. The U.S. export wire has quieted down the
last few days with no announced sales in a week. Trade will be looking for
signs of additional acres, with the weather challenges rolling acres over from
wheat and corn. On the May contract, trade has slipped below the 50-day at
$10.38, with the 100-day at $10.15 as the next level of support.
Wheat trade is 8 to 12 cents lower at midday with option expiration and
still some near-term rain in the forecast. Warmer conditions coming should help
to boost maturity, with rain needed to shake off freeze damage along with
salvaging diminished potential. Spring wheat growing areas look more open, but
will need to thaw for better progress to be made. Spring wheat seeding is
behind in Russia for the moment, but should see better catching-up going
forward. The slide in the ruble is helping Russia's export advantage, while the
stronger dollar is hurting us on Friday. On the May KC contract, support is at
the 20-day at $4.88, which we have eased below at midday, with the 100-day at
$4.70 below that. Resistance is the 50-day at $4.97.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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