DTN Midday Grain Comments 12/02 11:14
Grains Flat to Higher at Midday
Grain trade is flat to higher at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow futures down 2 points
and the Nasdaq up 20. The interest rate products are lower. The dollar index is
30 lower. Energies are mixed with crude up $0.20. Livestock trade is mostly
lower. Precious metals are mixed with gold up $6.60.
Corn trade is 1 to 3 cents higher at midday with light buying surfacing
overnight as we head toward the weekend with some profit-taking likely vs.
fresh shorts established on the break. Ethanol margins remain strong with
producer margins getting a boost from the lower corn, flat ethanol futures and
firmer unleaded values this week, as well as improved export opportunities.
Corn basis should have a firm tone with the break in futures slowing farmer
selling, and the winter storm potentially disrupting trade next week. On the
March chart resistance is at the $3.52 level where we find the 10-, 20-, 50-
and 100-day moving averages, with support is now at the lower Bollinger Band at
Soybean trade is 1 to 3 cents higher at midday with trade seeing a less
active day compared to earlier in the week. Meal is $2 to $3 higher and oil is
down 25 to 35 points lower. South American weather will gain importance as we
move into December with limited concerns in the near term with southeast Brazil
in good shape. Basis should remain steady in the near term with farmer selling
slowing with the rally fading and strong nearby crusher demand. The export wire
was quiet again Friday with forward South American exports coming into focus.
On the January chart, trade has edged back above the 10-day at 10.31 Friday
morning with the 20-day at 10.10 support below that. Longer-term resistance is
the $10.65 high earlier in the week.
Wheat trade is flat to 5 cents higher at midday with the spreads favoring
winter wheat after the shift toward the higher-protein Minneapolis wheat for
the bulk of the week. Protein will likely remain the biggest near-term driver
with plenty of lower-protein stocks that need to be blended off. Australian
harvest should continue to make good progress in the near term with good yields
coming in, extending the supply overhang. Cooler weather should push the crop
toward dormancy with the Western Belt remaining a bit more open on weather with
most moisture concentrated in Texas. The dollar is softer but remains about 100
on the index, continuing to limit competitiveness. On the KC March chart, trade
fell below the $$4.25 area where the 10- and 20-day moving averages were
clustered, as they become resistance again, and support will be the recent lows
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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