DTN Midday Grain Comments 02/07 11:45

DTN Midday Grain Comments 02/07 11:45 All Grains Lower at Midday Wheat is the downside leader at midday in broadly weaker trade. By David Fiala DTN Contributing Analyst General Comments The U.S. stock market indices are lower with the Dow 320 points lower. The interest rate products are weaker. The dollar index is 5 points higher. Energies are weaker with crude down $1.75. Livestock trade is mostly lower. Precious metals are mixed with gold up $0.40. CORN Corn trade is 2 to 3 cents lower at midday following the lead of wheat and soybeans with position squaring ahead of the USDA numbers tomorrow. The trade is focused on the number but at this juncture no major changes are expected nor changes in South American weather. Looking to tomorrow morning the trade is looking for Dec 1 corn stocks to be at 12.09 billion bushels, 450 million lower than last year. The 2018 yield estimate to slip to 177.9 BPA for production of 14.532. The domestic carryout is expected to be at 1.708 billion bushels versus 1.781 billion on the last USDA report. The world stocks at 307.6 million metric tons versus 308.8 mmt in December. Ethanol margins remain poor with the recent futures gains fading this week with board getting back to $1.28. Corn basis has remained flat to weaker with improved movement and more open weather. The export sales for the week ending 12-27 were 503,100 metric tons, which is noted giving a weak tone to the market. On the March chart support is the $3.73 lower Bollinger Band. Resistance is at the nearby trendline resistance at $3.82, the $3.87 200-day moving average. SOYBEANS Soybean trade is 9 to 11 cents lower with trade falling away from the $9.20 area, with further high-level trade negotiations with China apparently pushed back. Meal is $3 to $4 lower and oil is 10 to 20 points lower. South America weather looks to continue to drift towards improvement in Brazil and Argentina with harvest continuing to move in Brazil and podfill just about to start in Argentina. Crush margins remain strong overall, with basis likely to turn steadier on weather and the futures pull back. Report expectations are for 3.743 billion bushels for the Dec 1 stocks, vs. 3.161 last year. The updated 2018 yield estimate is at 51.8 BPA and production of 4.569 billion. Domestic carryout is expected to be at 926 million bushels, and world stocks at 112.67 million metric tons. The export sales for the week of 12-27 were 1.05 million metric tons of soybeans, 40,300 of meal, and 16,000 of oil. On the March chart resistance is at the $9.31 high printed Friday, then the $9.41 area where we find the seven-month high. Support is 50-day at $9.12 that we are testing at midday then the $8.96 100-day moving average. WHEAT Wheat trade is 8 to 12 cents lower with trade selling off after export bids faded and spread unwinding picked up speed after the early-week strength. The stronger dollar will weigh on trade as well. Southern Hemisphere harvest will continue in the near term. North American winter wheat areas have snow cover which is why the extreme cold did not boost trade with colder air working back this week. Russian values continue to work higher as well for the export market. On the report, stocks are expected to be 1.957 billion bushels, with winter wheat acres at 32.158 million, down about 400,000 from last year. Domestic carryout is expected to be 989 million bushels, and world stocks at 268.09 million metric tons. The delayed export sales were 593,000 metric tons. On the March Kansas City chart support is low at $4.96 1/2 with resistance the 10,20, and 50-day moving averages clustered at $5.05. 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 (BAS) Copyright 2019 DTN/The Progressive Farmer. All rights reserved.