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DTN Midday Grain Comments     04/01 11:32

   Grains Higher at Midday

   Trade is higher across the board at midday with soybeans leading trade.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are lower at midday with the Dow futures down 
90 points. The interest rate products are lower. The dollar index is 17 points 
lower. Energies are higher with crude up $1.60. Livestock trade is mixed. 
Precious metals are higher with gold up $17.


   Corn trade is flat to 3 cents higher in quiet action at midday. The trade 
continues to digest the report with spillover support from the soybean pit the 
most supportive item here today. The weekly ethanol production numbers had 
production down 1,000 barrels a day, and stocks 3.6% lower as driving demand 
increases with spring. The USDA acreage number came in at 89.2 million acres 
versus 88.7 expected, 90.6 a year ago and a high-side estimate of 89.7 million. 
The March 1 corn stocks number was also above expectations at 7.744 billion 
bushels versus 7.61 expected a high side estimate of 7.81 billion bushels. Both 
numbers were negative, but the market bias to a larger price drop near term 
would be that acreage could sink by 250,000 to 1 million and we would encourage 
usage. So range-bound trade, in the same range we have been in, appears to be 
the best bias for the rest of the week. Sorghum acreage came in at 7.9 million 
acres versus 7.6 expected and 7.14 a year ago. Just a quick note on total corn, 
beans, wheat and sorghum acreage comparisons, total acreage was 1.3 million 
acres lower than a year ago and 500,000 acres fewer than expected. In the big 
picture, this helps limit downside a little looking forward; lower prices from 
here forward this spring could also lead to slight additional acreage 
reductions. The December low of $3.92, and May low of $3.67 this month should 
serve as major support the rest of the week, with the 20-day resistance at 
$3.86 on May and $4.10 on December. 


   Soybean trade is 9 to 15 higher at midday with some positive follow through 
developing after the report yesterday. Meal is $1 to $2 higher and oil is 60 to 
70 points higher. The March 1 stocks number was lower than expected at 1.333 
billion bushels. This is still well above 994 million bushels a year ago, but 
not over the high side estimate of 1.4 billion bushels. The 2015 March Soybean 
Planting Intentions number was at 84.64 million acres versus 85.9 expected and 
83.7 a year ago. In the big picture this should limit downside in beans, but 
corn and outside markets will provide additional direction. Key chart 
resistance areas are the $9.78 20-day on May and $9.58 on November, and we have 
moved above these areas at midday. Support is at the reaction lows printed 
around the report, which were new lows for the move at $9.51 on May and $9.33 
on November. 


   Wheat trade is 10 to 15 cents higher across the three contracts after 
trading a dime lower early on. The dollar is still well off the recent highs 
but the momentum has turned back higher in recent day although the momentum is 
slowing this morning, and much of the Southern Plains remain warm and dry. The 
all-wheat planted area was at 55.37 million acres versus 55.8 expected and 56.8 
a year ago. Spring wheat was at 13 versus 13.24 expected and 13.03 a year ago. 
Winter wheat acreage was slightly higher which is also behind our lower post 
report trade. The March 1 wheat stocks were at 1.124 billion versus 1.14 
expected and up from 1.057 a year ago. So the stocks were actually smaller than 
expected. Wheat rallied up to a 1 month high Monday so we are only down to the 
10-day moving average now, which is support at $5.60 on the May Kansas City 
contract. The next level of support is the $5.48 20-day with nearby resistance 
the weekly high at $5.78. 

   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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