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
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
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 email@example.com
Follow David Fiala on Twitter @davidfiala
Copyright 2015 DTN/The Progressive Farmer. All rights reserved.
DTN offers additional daily information available free through DTN Snapshot – sign up