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DTN Midday Grain Comments     01/13 11:34

   Grains Mixed at Midday

   Chart buying has beans printing new highs for the move at midday. 

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are higher with the Dow futures up 40. The 
interest rate products are lower. The dollar index is 11 points lower. Energies 
are lower with crude down $0.40. Livestock trade is higher. Precious metals 
lower with gold down $5. 


   Corn trade is 2 cents lower in slow trade; the higher soybean trade is 
limiting downside in corn. The market is further digesting the USDA numbers 
seen yesterday and sideways trade has been the result. The reports did not 
change much for the corn market picture; most believe sideways action is likely 
the rest of the month. The USDA January USDA World Agricultural Supply and 
Demand Estimates ("WASDE") delivered a lower than expected carryover at 2.355 
billion bushels versus 2.396 billion bushels expected. This is still the 
largest carryover in modern history. A yield reduction from 175.3 to 174.6 
bushels per acre was the main item of change yesterday. The poor ethanol 
margins should limit upside in corn near term. On the March corn chart support 
is at the $3.51 100-day moving average with resistance at the $3.62 3/4 January 
high. The trading range through midday has only been 4 cents, so unless 
soybeans give some bigger spillover direction most traders think corn will be 
quiet this afternoon.  


   Soybean trade is 4 to 7 higher at midday and near the daily highs; meal is 
up $7 which is giving beans the most support due to short covering. Soybean oil 
is down 30 points. The soybean market received some friendly news versus 
expectations from the USDA and now have positive chart items to finish our the 
week. The quick 50 cent run up from our one-week lows have many margin calls 
generated on short positions. The USDA yield reduction to 52.1 bushels per acre 
versus 52.5 on the last USDA report lead to a friendly carryover number on the 
WASDE down to 420 million bushels versus 468 million expected. The global 
carryover was at 82.3 million metric tons versus 82.5 expected. Some weather 
uncertainty due to too much moisture in Argentina is letting futures run up 
here at midday ahead of the long holiday weekend. On the March soybean chart 
support is at the 20-day and highest major moving average at $10.17, with 
nearby resistance at the $10.50 upper Bollinger Band which we are testing at 


   Wheat trade is mixed with Chicago down 2 cents, Kansas City up 2 cents and 
Minneapolis a nickel higher at midday. Fridays are trend days so trend buying 
and spillover support from beans is noted supporting wheat at midday. The USDA 
numbers were mixed yesterday with friendly winter wheat plantings but bigger 
carryover estimates. Meaning even with some lower planted acres, heavy 
historical supplies will remain. Some major world production areas need to have 
weather hurt production to change our heavy supply side fundamental picture for 
wheat. March Kansas City support is at the $4.29 100-day moving average, 
resistance is at the $4.60 200-day moving average. 

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


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