DTN Midday Grain Comments

General Comments

The U.S. stock market indices are mixed; the Dow futures are up 12. The interest rate products are mixed. The dollar index is 10 lower. Energies are mostly higher with crude up 85. Livestock trade has cattle higher and hogs mixed. Precious metals are higher with gold up $5.

CORN

Corn trade is 1 to 2 cents higher at midday and we have been up 3 cents. In the big picture the trade looks comfortable trading within the range of the USDA report day last week. Next Friday we will have the quarterly grain stocks report. The weekly EIA numbers listed ethanol production 1.34% lower on the week with stocks 0.03% higher. Gasoline demand was off 1.82%. Ethanol margins movement is not good today with ethanol down a penny and corn up 1 to 2 cents at midday. Harvest should continue to make progress with warmer near term weather before a potential shift cooler and wetter next week. Basis has been fairly steady this week. On the December chart support is at the $3.44 1/4 August low with resistance at $3.53, where we find the 10-day and 20-day moving averages, which are also the lowest major moving averages. The technical trend remains down with trade below all major moving averages and trade is not currently oversold. Market bulls argue this is old news and we have not slipped further at this juncture.

SOYBEANS

Soybean trade is 3 to 4 cents higher at midday; meal is $1.50 higher and soybean oil is up around 10 points. The trading range has been a dime and mostly positive for beans with November continuing to find selling interest in the $9.75-$9.80 area. South America looks to remain mostly dry near term with major planting progress just around the corner with improved rains for Brazil expected next week. The export news is expected to remain positive but buyers may be starting to back off and wait for lower prices during the US harvest. On the November chart support was at the 10-day at $9.65 is once again support with the bounce back late yesterday with the 20-day at $9.56 below that, with the 200-day at $9.79 3/4 major resistance.

WHEAT

Wheat trade is 2 to 3 cents higher at midday. Wheat trade is trying to work back to the upper end of the range with follow-through buying after the late rally yesterday. Australia continues to see some struggles as the crop emerges from dormancy, while the large Russian crop will continue to keep pressure on the ability of the US to compete on the world market. Canadian production estimates yesterday left the sharp decline in wheat production intact. Egypt is starting to look around for cargoes again. On the December Kansas City contract we slipped below the 20-day at $4.38 with longer term support the $4.20 contract lows with resistance at the recent high at $4.51 3/4, with the 50-day at 4.72 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

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