DTN Midday Grain Comments 12/12 11:19
Grains Trending Higher at Midday
Flat to slightly higher trade is seen with some chart buying being met with
selling at the recent highs.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow futures up 340. The
interest rate products are firmer. The dollar index is 35 lower. Energies are
firmer with crude up $0.80. Livestock trade is mixed. Precious metals are flat
to higher with gold up $4.
Corn trade is flat to 1 cents higher at midday with trade following the lead
of the soybean market with weaker action as soybeans back off the highs. Corn
basis looks to be flat in the near term. The weekly ethanol report showed
production down 23,000 barrels per day, with stocks down 140,000 barrels, with
ethanol futures a penny higher. The December WASDE report showed little change.
The domestic carryout was 1.781 billion bushels, up 50 million from last month,
and the world number was 308.8 million metric tons, up 1.3 from last months big
jump. Yields were left unchanged at 178.9, along with South American production
at 94.5 million metric tons for Brazil, and 42.5 mmt for Argentina. On the
March chart, the 20-, 50-, and 100-day moving averages at $3.77-$3.79 is our
chart support area with resistance at the new high scored at $3.87 3/4.
Soybean trade is 3 to 6 cents higher at midday with trade optimism with
continued talk of major Chinese purchases incoming but we have slipped nearly a
dime off the highs. Meal is $1.00 to $2.00 higher and oil is flat to 10 points
lower. South America continues to make good progress with early harvest
approaching fast with a few dry pockets in Brazil drawing more worry. Basis
will provide signals on the quantity of nearby cash business getting done with
flat to slightly firmer trade so far this week. The daily wire had sales of
130,062 metric tons sold to Mexico, and 110,000 to unknown, with talk of
500,000 mt purchased by China. The WASDE report left yields and domestic
carryout unchanged at 52.1 BPA and 955 million bushels, with world carryover at
115.3 mb this month, up from 112.1 mb last month, with Brazil and Argentina
production left unchanged at 94.5 million metric tons and 55.5 respectively.
January support is at the 10-day at $9.08. Resistance is the 200-day at $9.39.
Wheat trade is 2 to 6 cents higher at midday with trade rebounding from the
post-report weakness Tuesday. The dollar strength has relaxed overnight with
more progress needed to boost U.S. competitiveness. The WASDE report raised
domestic carryout 25 million bushels to 974 million metric tons, with world
stocks at 267.8 million metric tons, up from 266.7 mmt last month. Australian
harvest will continue in the near term. North American winter wheat is seeing
milder weather. On the March Kansas City chart, support is at the 20-day at
$4.99 that we cleared on Friday with the 50-day at $5.19 the next round up.
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 him on Twitter @davidfiala
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