The U.S. stock market indices are higher with the Dow futures up 50 points. The interest rate products are mostly higher. The dollar index is 15 lower. Energies are mixed with crude 0.20 lower. Livestock trade is mixed. Precious metals are mixed with gold up $2.70.
Corn trade is 2 cents higher at midday with trade looking to find footing after the bearish reaction to the bearish report yesterday. The near-term weather pattern in expected to continue with some changes in the extended forecast which the trade sees as mixed. Ethanol margins improved on the set back but the energy complex has been weak Thursday into today. The USDA yield number coming in at 169.5 bpa was above the range of trade guesses and the average of 166 bpa yield giving a production number of 14.153 billion bushels versus 14.255 a month ago. New crop carryover came in at 2.273 billion vs. the average new crop carryover estimate is at 1.966 billion bushels versus 2.325 a month ago. The world carryover was 200.87 vs. the average guess 194.7 million metric ton versus 200.8 on the July report. There are doubters out there that remain friendly; market bears argue this is still significantly below the 2016 yield. On the December chart support is the new low at $3.70 1/4, with first resistance at the 10-day of $3.79.
Soybean trade is 1 to 3 cents higher at midday with light short profit taking after the hard selloff yesterday due to the USDA hiking yields unexpectedly. Meal is $2 to $3 higher and oil is 5 to 15 points lower. The weather forecast is trying introduce more moisture for next week with the mild temps continuing. On the report with the yield raised to 49.4 BPA, vs. expectations of a reeducation from 48 to 47.4 bushels per acre the trade is still in shock, so the risk of a slide late is possible. The new crop carryover jumped to 475 million from 460 in July. The number was just above the highest trade estimate. The world carryover moved to 96.98 million metric tons vs an expected drop to 92.2 million metric ton from the 93.5 million metric ton July number. We are higher at midday but the momentum is flat. On the November chart support becomes the fresh low at $9.38 from yesterday, with the 10-day at $9.68 the first level of resistance on a bounce.
Wheat trade is 4 to 19 lower at midday with spring wheat selling off once we got to the day session. Chicago wheat is the midday leader sitting only 4 cents lower with spread unwinding giving Chicago support. The August USDA carryover was above expectations at 933 million bushels versus 907 million expected and 938 on the July report. The world wheat carryover was 264.69 million metric tons versus the average trade guess of 256.7 million metric tons. Spring wheat production was 402 million versus an average guess of 393 million bushels. No fresh friendly news which has wheat continuing to slip. On the December Kansas City contract support is the $4.63 May low with resistance at the 200-day at $4.93.
David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered Advisor.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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