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DTN Midday Grain Comments     10/05 11:45

   All Grains Higher at Midday

   Grain trade is seeing single-digit gains in slow midday trade.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock markets are higher with the Dow futures up 200 points. The 
interest rate products are lower. The dollar index is 28 points higher. 
Energies are higher with crude up $1. Livestock trade has been mixed. Precious 
metals are lower with gold down 3.


   Corn trade is 2 cents higher at midday with outside market support and 
spillover support from beans. The weekly export inspections were low for corn 
at 469,697 metric tons which has limited upside. Outside markets are supportive 
with crude up a buck and the Dow up 200. The corn harvest should be in the 
26-28% harvested range on the weekly progress report this afternoon versus the 
average pace for this time of year near 35%. Informa released their updated 
yield and production estimates on Friday with a 168.4 yield versus the 167.5 
September USDA number but slightly overall production due to fewer harvested 
acres. The market does not expect many forecasts to be too far off the 
September USDA but the average trade guess appears to be heading for a slight 
reduction, 25 million to 50 million bushels, off the September USDA 13.585 
production number. This expectations helped limit downside in corn last week 
and should this week. Profarmer was down around 13.3, so market bulls may still 
look for that type of number and talk about it this week as position squaring 
should dominate trade. Stats Can, the Canadian equivalent of the USDA, released 
updated production numbers on Friday. Their Corn, barley and oat numbers were 
on both sides of expectation, so fairly neutral for corn. The October USDA 
World Agricultural Supply and Demand Estimates are due out on Friday morning 
which is the news that should dominate this week. On the nearby December chart 
nearby support is the 100-day, at $3.89, with resistance at the $3.95 September 
high then the 200-day at 3.99. Key support is at the 20-day moving average at 


   Soybean trade is 9 cents firmer at midday with meal $2 higher and bean oil 
up 60 points. Bean oil helped support beans on Friday which is carrying into 
today along with a good weekly inspection number. The soybean harvest should 
move fairly quickly this week with progress reaching the halfway point prior to 
the USDA report on Friday. Harvest progress this afternoon should be in the 
42-45% area which would 3-5% ahead of the average pace. Early yield reports 
remain which was behind the lower finish to last week along with harvest 
pressure. Informa gave a 47.2 yield estimate on Friday looking to this Friday's 
report. They gave a 3.878 billion bushel production number using fewer acres, 
FC Stone's estimate was 3.92 billion versus the 3.935 USDA number. It appears 
the average trade guess should be looking for a 10-30 million bushel drop in 
production. The Stats Can numbers listed soybean production slightly higher 
than expected on Friday, but down from 2014. Canola production was lower than 
expected and also down from last year which is one item that has given soybean 
oil support along with chart buying. The weekly export inspections were 
friendly at 1.122 million metric tons.  On the November chart the contract low 
at $8.53 1/4 is long term support with the 20-day moving average at $8.78 
nearby. Upside resistance from here is at the $9.02 high seen last week, then 
the 50-day at $9.00. 


   Wheat trade is up 2 to 3 cents following beans higher. Trade was initially 
lower last night due to follow-through selling. The wheat market is holding a 
light uptrend which started in early September but we may be challenging 
support levels this week. The Stats Can numbers on Friday listed all wheat at 
26.06 million metric tons versus 25.2 expected and 29.4 a year ago; the higher 
than expected number pressured the market on Friday / stopped some of the 
upside momentum. The market will continue to watch for an export market 
improvement with the futures trying to hold the higher trend. The weekly export 
inspection number this morning was lower than the past few weeks at 557,109 
metric ton. Fundamentally we have some world production items to talk about, 
but we will be reminded of the large supply side items on the USDA report 
Friday which will likely limit upside this week. On the Kansas City December 
chart support is at the 10-day at $4.97 and 20-day moving average at $4.91 with 
resistance at the $5.12 recent high then the $5.34 100-day moving average. 

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered trading adviser.
David Fiala can be reached at 
Follow David Fiala on Twitter @davidfiala


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