DTN Midday Grain Comments 04/20 11:26
Grain Futures Up Big Midday Tuesday
Corn is 15 cents higher on May, 9 cents higher on December, soybeans are 17
to 23 cents higher and wheat 7 to 13 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is weaker with the Dow off 275 points. The U.S. Dollar
Index went to a new low for the move but has bounced to 0.08 higher at midday.
Interest rate products are firmer. Energies are lower with crude down $1.
Livestock trade is firmer. Precious metals are higher with gold up $8.
Corn trade was firmer overnight then saw some explosive upside with short
covering early in the day session, getting nearby to 20 cents higher. At
midday, May is 15 cents higher with new crop up 9 cents. The new high for the
move on May is $6.11 3/4 at this juncture, and December new crop went to $5.33
1/2. Expect buy stops above these numbers the rest of the day with a chance of
limit-up if short covering occurs Tuesday afternoon. Ethanol was firm Monday
into Tuesday morning, giving corn support. The cool weather and snow has not
given corn a chance to see early plantings or early development, which is
limiting sellers. The forecast remains cool with the first few days of May,
currently expected to still see many daily lows across the Corn Belt in the
40s. Corn basis continues to hold firm throughout the belt. The weekly Monday
afternoon USDA progress numbers had planting at 8% on the five-year average,
with emergence at 2% -- same as the average. On the May contract, chart
resistance is the fresh contact high with support at the $5.84 10-day moving
average then the 20-day at $5.68.
Soybeans are up around 23 cents on May to 17 cents higher on November at
midday. Meal is up $4.50 and bean oil up 1.80 cents on nearby to 0.85 cent on
new crop. The upward momentum and lack of selling has allowed trade to march to
new highs. Traders now expect a very active rest of the week going into May
option expiration on Friday. The cool weather will limit early planting and
early development in the U.S. The uncertainty is limiting sellers this week.
Although the market knows we can still have the crops planted near
normal/average timeframes, we still lose some early advantage with the
country-wide extreme cold start to the growing season. The weekly report had
soybean plantings at 3% complete versus the 2% average. On the May soybean
chart, support is at the 10-day at $14.18 with resistance at our morning high
of $14.85 1/2 then $15!
Wheat trade is 7 cents higher on Minneapolis at midday with the winter wheat
contracts sitting 13 cents higher. Momentum has stalled at midday with futures
around a dime below the early highs. Support is coming from the row crop
strength and the cold air and snow across Kansas, but market bears argue the
moisture is OK. The downtrend in the dollar is supportive for exports with a
new dollar low for the move overnight. KC has narrowed back to a 40-cent
discount to Chicago with Minneapolis now only a nickel above Chicago. The
weekly export inspections were strong Monday at 613,595 metric tons, helping
fuel this April futures recovery. The weekly crop progress Monday afternoon
showing winter wheat heading at 10% versus the 14% average, and conditions
unchanged at 53% good to excellent. The spring wheat planting were at 19%
versus 12% on average. KC May on the chart has support at the 50-day at $6.07,
with resistance at our daily high of $6.35 3/4 then the $6.64 contract high
printed in late February.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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