DTN Midday Grain Comments

General Comments

The U.S. stock market indices are lower with the Dow futures down 55 points. The interest rate products are higher. The dollar index is 31 lower. Energies are mostly mixed with crude up 0.40. Livestock trade is lower. Precious metals are mixed with gold up $3.30.

CORN

Corn trade is 2 to 3 cents lower with trade making new contract lows this morning after early gains failed to hold with better-than-expected-yield results this a.m., and the soybeans failing to hold their gains. The weekly ethanol report showed production 0.66% lower, and stocks were 1.46% lower, and gasoline demand was 1.12% higher. Ethanol futures have edged lower with summer driving season winding down. The crop tour will move deeper into the belt today with Nebraska pegged at 163, and Indiana was 171 with mixed results in Illinois so far, and some better ones in Iowa. On the December chart support is the new low at $3.57 1/2 made this morning that is a new contract low. Basis has been mostly steady with late bushels expected to move soon. Resistance is at the 10-day moving average at $3.67.

SOYBEANS

Soybean trade is 1 to 4 cents lower with trade failing to hold the early spike on the biodiesel tariff announcement on Argentina with the crop tour moving on today and a drier forecast after the recent rains. Meal is $2 to $3 lower and oil is 45 to 55 points higher. Rain coverage was good yesterday, but drier near term weather and cooler weather will likely offset each other in the near term. The crop tour found lower pod counts so far, but that doesn't always translate to lower yields. Basis has been steady to firmer with demand holding up pretty well in the near term. China cancled 640,970 of old-crop sales, but that was partially offset by 295,200 metric tons to unknown on new crop. On the November chart support is the 10-day at $9.36 which we have edged below at midday with the recent low below that at $9.21, with the 20-day at $9.56 as resistance.

WHEAT

Wheat trade is flat to 4 cents higher at midday with light buying, with trade hanging on despite row crop weakness and the recent pattern for fund selling to come in during the day session. Russian harvest continues to make good progress which will keep pressure on for now with production estimates still working higher. The dollar rally has faded once again moving back towards the lower end of the range. Trade is heavily oversold, which should translate into bigger short covering at some point ahead of winter wheat planting. On the December Kansas City contract support is the $4.25 fresh low with resistance at the 10-day at $4.48.

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

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