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DTN Midday Grain Comments     02/19 11:03

   Grains Lower at Midday

   Early gains out of the holiday give way to broad selling during the day 
session with wheat the downside leader again.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are mixed with the Dow near unchanged. The 
interest rate products are weaker. The dollar index is 27 points lower. 
Energies are firmer to narrowly mixed. Livestock trade is mixed with cattle 
leading and hogs limit lower. Precious metals are firmer with gold up $18.00. 


   Corn trade is 2 to 3 cents lower with early gains fading with wheat trade 
providing spillover pressure to start the week. The second crop in Brazil is 
being planted in good condition for now. Planting is heading past the halfway 
point with early rains looking to be good for germination. The energy complex 
is maintaining recent gains to support ethanol a little more in the near term 
with better seasonal action getting close. Weather is still limiting driving 
for now with ethanol margins lower this week. Corn basis should firm again with 
more weather disruptions. The weekly export inspections were decent at 941,811 
metric tons. On the March chart, trade has support at the recent $3.71 1/4 low, 
with the lower Bollinger Band at $3.72 3/8. Resistance is still clustered at 


   Soybean trade is 3 to 6 cents lower at midday with trade holding just above 
$9.00 as trade talks resume in the U.S. this week. Meal is $1 to $2 lower, and 
oil is narrowly mixed. South America weather should maintain the recent pattern 
in the coming days. Brazil's harvest is moving along, and drier weather is 
forecast in Argentina. Crush margins remain strong with meal holding $300 a ton 
or better still, with January crush remaining strong. Trade talks will continue 
in the U.S. this week with some progress scored this week, according to most 
sources, and the March 1 deadline looming. Weekly export inspections were 
decent at 1.031 million metric tons. On the March chart, resistance is now the 
moving averages clustered at $9.13-9.15, which we just below, and then the 
$9.01 support level from the early session lows, which is also the 100-day 
moving average.


   Wheat trade is 9 to 13 cents lower. Winter wheat is holding up slightly 
better with firmer intra-month trade still showing, while the spring wheat 
spreads have moved a nickel wider. The U.S. has seen better export business 
lately, but world prices have followed the U.S. selloff the last couple of days 
with European action stabilizing on Monday before selling returned. The dollar 
remains near the upper end of the range but is reversing today. Cold weather is 
expected to keep some stress on the Plains in the near term, with winter 
wanting to hang around. Weekly export inspections were disappointing at 357,131 
metric tons. On the March KC chart, support is low at $4.67 with resistance the 
10-day at $4.91.

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


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