DTN Midday Grain Comments

General Comments

The U.S. stock market indices are firmer with the Dow futures up 160. The interest rate products are mixed. The dollar index is 10 higher. Energies are firmer with crude up $2.45. Livestock trade is mixed. Precious metals are firmer with gold up 9.60.

CORN

Corn trade is 4 to 5 cents lower with early supportive trade fading during the day session. Corn basis looks to be flat with the Holiday slowdown in effect. The ethanol margins continue poor with more talk of layoffs, slowdowns and shutdowns, which should help ethanol firm but getting supplies down will be a process with futures edging lower this morning even with the energy complex rallying. Weekly export inspections were ok at 996,098 metric tons. On the March chart, the 20-, 50- and 100-day moving average area of $3.79-$3.80 is now resistance with support the lower Bollinger Band at $3.71.

SOYBEANS

Soybean trade is 4 to 6 lower with trade reaching oversold condition and more supportive outside markets this morning with early buying drying up. Meal is flat to $1.00 lower and oil is 20 to 30 points lower. South America remains in the recent weather pattern with some dry pockets, and the start of early harvest in Brazil with overall concerns still limited. Basis will provide signals on the quantity of nearby cash business getting done with flat to slightly firmer trade this last week and some rail bids appearing and along with better river bids. Export inspections were disappointing at 651,181 metric tons. South American currencies have turned weaker again. January support is the 100-day at $8.79 which we are testing at midday, with resistance at the 50-day at $8.87.

WHEAT

Wheat trade is 4 to 8 cents lower with early gains evaporating and trade fading back to the lower part of the range. The dollar is carving out more of a range as well with the down trend potentially supportive longer term. Australian harvest will continue in the near term, while Argentina battles quality issues, forcing Brazil to look elsewhere for some imports. North American winter wheat is seeing milder weather, helping late emergence with little nearby weather concerns. Russia has continued to export aggressively. Weekly export inspections were better at 543,126 metric tons. On the March KC chart support is at the fresh low at $4.97 with the 20-day at $5.06 just above the market as resistance.

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

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