DTN Midday Grain Comments

All Grains Higher at Midday

David M Fiala
By  David Fiala , DTN Contributing Analyst
(DTN photo by Nick Scalise)

General Comments

The U.S. stock market indices are mixed. The interest rate products are lower. The dollar index is 50 higher. Energies are mixed with crude up 0.50. Livestock trade is mixed with cattle higher and hogs lower. Precious metals are lower with gold down $7.


Corn trade is 2 cents higher at midday; trade has seen a range of a penny lower to 4 higher. Follow-through buying to the modest recovery after the report sell off was noted for our firmness this morning. On the report, we got a production number of 14.184 billion bushels on a yield of 169.9, with yield up 0.4 from last month vs. expectations of 167.8 BPA, and 14.0 billion. Ending stocks rose to 2.335 billion bushels, up from 2.273 last month, and vs. expectations of 2.133. The world new crop stocks were pegged at 202.5 million metric tons, up from August at 200.9 and the average guess of 198.2. The report was negative, the trend of reports in negative giving the market bearish trend items, but longer-term hopes for bulls that the lows are printed. This is what the market is talking about today. From a cash trade perspective higher trade is expected to garner good selling interest, new lows will not garner farmer selling interest. But with harvest approaching full steam in the near future due to warmer dryer weather, end users are not concerned about gaining farmer ownership. The weekly ethanol EIA numbers had stocks up 0.08%, production off 1.23% on a 4.94% rise in gasoline usage. This has ethanol fractionally higher at midday. On the December chart support is at the $3.44 1/4 low. The 20-day at $3.57 is noted chart resistance that held this morning. Important chart areas are a close above the 20-day or a close below the $3.55 10-day. The market slipped below the 10-day yesterday and a close below it today is a 2-day close below the 10-day and all major moving averages, a bearish chart signal.


Soybean trade is 5 cents higher at midday; the follow-through strength following the late-day strength on Tuesday has us recovering the selloff following the negative Tuesday USDA numbers. Meal is flat to $4 higher, and bean oil is mixed. It seems like the strength has stalled, but we are holding a few cents off the daily highs. On the report, production was pegged at 4.431 billion bushels with yield of 49.9 BPA, up from 4.381 and 49.4 last month, vs. expectations of 4.321 and 48.7. The domestic carryout was left unchanged at 475 million bushels, vs. an average guess at 437 million. The world ending stocks were 97.5 million metric tons, down from 97.8 last month, and just above the average guess of 97.3. The USDA announced 132,000 metric tons sold to unknown yesterday, with more sales likely announced given the overnight action. So good demand and heavy historic supplies continue to be talked about day to day; seasonal harvest pressure is expected to limit upside. On the November chart support is the 20-day moving average at $9.47 with the 200-day at $9.81 major resistance.


Wheat trade is 2 to 5 cents higher at midday with trade working to build off the strong finish to the day yesterday. Basis has started to move higher for the high-protein wheat again indicating that quality remains a premium. On the neutral report yesterday the domestic carryout was left unchanged at 933 million bushels vs. expectations of 920 million. The world carryout was at 263.1 million metric tons versus an average guess at 263.9 and 264.7 last month. On the December Kansas City contract, support is the 10-day at $4.40 with resistance the recent high at $4.50, with the 50-day at 4.85 above that.

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


David Fiala