DTN Midday Grain Comments 12/09 10:59
Beans, Corn Higher at Midday; Wheat Mixed
Soybeans lead trade higher at midday ahead of the December USDA report.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 60. The
interest rate products are higher. The dollar index is 55 points higher.
Energies are higher with crude up 0.50. Livestock has is mostly lower. Precious
metals are mixed with gold down $9.
Corn trade is 2 to 3 cents higher in quiet midday trade ahead of the WASDE
report at 11. Spillover strength from energies and the soybean trade is helping
add support as well as some light short profit taking after the negative day
yesterday. Ethanol futures have edged higher at midday helping to support
margins. The WASDE report is expected keep production numbers unchanged with
minor changes to carry out with the average guess at 2.43 billion bushels and
range of 2.364 and 2.584. Chart support is at the $3.53 20-day, then the $3.50
1/4 low printed yesterday. Resistance is the recent high at $3.64 then the
five-month high at $3.69.
Soybean trade is 7 to 8 cents higher at midday with buying picking up during
the day session with support from weather and demand ahead of the report. Meal
is $5 to $6 higher, and oil is 25 to 35 points lower. Brazilian crop estimates
are rising even as weather issues linger for South Brazil and Argentina, which
may have some production ideas lower in Argentina. The focus on weather will
intensify into December. The dollar strength will hurt exports with early
production from South America coming soon. The USDA announced 132,000 metric
tons of soybeans sold to unknown. The monthly report tomorrow is expected to
show limited changes with the average carryout guess at 469 million bushels. On
the January chart the 20-day at $10.22 is now support with resistance at the
$10.38 10-day then the $10.65 four-month high.
Wheat trade is narrowly mixed at midday with the strong dollar limiting
follow through buying interest after the bounce yesterday. India dropping
import duties until March which should help bolster additional demand. Lower
temperatures will have to be watched with limited snow cover but moisture has
improved for some areas with the recent systems, especially in the eastern part
of the winter wheat belt. This for sure appears to be limiting selling in wheat
which is at some low historic prices. Drops around zero or lower that can cause
winter kill with much of NW Kansas hitting that area. The demand for protein
will continue to be key market mover on spread trade, and the Southern
Hemisphere harvest continues to move along well with Argentina and Australia
seeing good yields. On the report, carryout is expected to be 1.14 billion
bushels, steady with last month. On the Kansas City March chart support is at
the $3.99 3/4 contract low printed Wednesday, resistance is at the $4.09 10-day
moving average which is the lowest major moving average.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow Fiala on Twitter @davidfiala
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