DTN Midday Grain Comments

General Comments

The U.S. stock market is higher this morning with the Dow up 90 points. The interest rate products are lower. The dollar index is 38 higher. Energies are higher with crude up $0.20. Livestock trade is mixed. Precious metals are lower with gold down $6.50.

CORN

Corn trade is 2 to 4 cents lower at midday with early gains giving way toward a test of the lower end of the range with wheat and soybeans adding spillover pressure. Ethanol margins are under a little bit of pressure this morning with ethanol futures moving lower, while blender margins have improved. Basis should see harvest pressure, while carry remains at wide levels with steady trade this week. Weather looks to remain open and better this week for drying corn with some weekend rains expected for the central and eastern Corn Belt. Corn moisture has been one of the biggest near-term concerns as it has stayed stubbornly high in some areas, keeping the harvest focus on soybeans. The daily wire had two export sales with 125,000 metric tons going to Spain, and 120,000 metric tons to unknown. On the December chart support is at the $3.42 1/2 low with resistance at the $3.54 50-day moving average.

SOYBEANS

Soybean trade is 2 to 6 cents lower at midday with early strength evaporating as selling picked up with broader harvest pressure. Meal is $2.50 to $3.50 lower, and oil is 30 to 40 points higher. South American weather forecasts continue to show an uptick in moisture for northern Brazil in the extended forecast with the wetter areas drying out, which should boost planting progress into next week. Harvest should be well past the halfway point now, with rains potentially slowing progress this weekend. USDA announced 198,000 metric tons of soybeans sold to China on the daily wire. On the November chart, trade is above all the major moving averages, with the 200-day at $9.75 support, with resistance the recent high at $10.03.

WHEAT

Wheat trade is flat to 4 cents lower at midday with early buying fading yet again today with the broader commodity weakness today. The dollar is moving more range bound in the near term after rallies and breaks have failed with today having trade toward the upper end of the range. U.S. exports have been slowed lately as Black Sea origin continues to dominate world movement. Australia will see more focus coming forward, as well, as the growing season progresses with some flood damage concerns in South America. Planting progress should pick up substantially for winter wheat this week, along with warmer weather supporting emergence with insurance dates coming into play in some areas. On the December KC, support is the lows at $4.20 with the 10-day at $4.31 holding on the test this morning with further resistance at the 20-day at $4.37.

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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