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DTN Midday Grain Comments     01/29 11:22

   All Grains Lower at Midday

   The U.S. stock market is firmer with the Dow up 88. The dollar index is 10 
points higher. Interest rate products are firmer. Energies are mixed with crude 
down $0.20. Livestock trade is lower. Precious metals are narrowly mixed.

By David Fiala
DTN Contributing Analyst

 General Comments

   

   

   CORN

   Corn trade 2 cents lower; trade has seen a range of nearly 2 higher to 4 
lower with March futures trading squarely in the middle of the $3.80s. After 
some initial strength, the limited buying was found to give us follow-through 
to the upside overnight. The market is looking at a trading range with funds 
seemingly wanting to buy on breaks to balance positions with hedging interest 
noted on rallies. Ethanol margins remain range bound with the energy complex 
bouncing yesterday into today after the big drop off the past three weeks. The 
chart has not turned but we have ethanol and unleaded around 2 cents higher at 
midday. The crude and energy spiked higher on the Iran news but then slipped to 
a three-month low on Monday, down approximately $13 a barrel from the high seen 
during the first week of January. The dollar is firming, so outside market 
resistance has kept corn from moving higher. Corn basis should continue to 
react to day to day moves. On the March contract support is the lower Bollinger 
Band at $3.78 1/2 and then recent lows at $3.77, then the $3.71 4-month low, 
with resistance at the $3.94 recent 2 1/2 month high.

   SOYBEANS

   Soybean trade is 2 cents lower; meal is off $1.50 and bean oil is flat. 
Beans and corn seem to have some spreading activity going on as well as minor 
chart inspired positioning illustrated by the opposite moves yesterday into 
this morning, but now at midday they are both slightly lower. South American 
weather is status quo for the most part which has the market, at this juncture 
in the growing season, feeling more comfortable with where production will be. 
So the soy market has priced-in that negative news, or taken out weather 
premium, this month with prices now 70 cents below the high seen at the 
beginning of the month. The Brazilian ral remains very cheap as well hurting 
U.S. export competitiveness. Good crush margins should be offering support. The 
March soybean chart support is the $8.82 early December low, with resistance at 
the $9.11 10-day moving average. 

   WHEAT

   Wheat trade is around a nickel to 7 cents lower at midday turning over on 
the chart with spillover weakness from corn, and the soybean weakness over the 
past three weeks. Cold threats remain limited for the Plains and now that we 
will be in February next week, the trade sees less chances for winter kill. 
Kansas City is at an 87-cent discount to Chicago near the top of the recent 
range, while Minneapolis is back to a 25-cent discount. Russian values remain 
elevated with trade looking for confirmation of various milling grades to China 
in the short term. The March Kansas City chart support is the lower Bollinger 
Band at $4.71, and resistance is the 20-day at $4.87. We are near a three-week 
low, with the March Kansas City 50-day at $4.52, then the 200-day at $4.58 the 
next level of support to point to since it appears this rally has or is turning 
over. 

   

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


(AG)

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