DTN Midday Grain Comments 12/02 10:59
Wheat, Corn Higher at Midday
Corn is 3 to 4 cents higher, soybeans are 1 to 3 cents lower, and wheat is 7
to 13 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is flat to weaker with the Dow down 10. The dollar
index is 9 points lower. Interest rate products are mixed. Energies are firmer
with crude up $0.85. Livestock trade is flat to slightly weaker. Precious
metals are mixed with gold up $10.00.
Corn trade is 3 to 4 cents higher at midday with trade bouncing back from
overnight selling with support from strength in wheat and firmer spread action
while the export wire remains quiet. Ethanol margins continue to deteriorate
with the rebound in corn, with production falling slightly by 16,000 barrels
per day, while stocks continue to grow as demand decline rising by 374,000
barrels. Basis remains generally strong. On the March contract support is the
lower Bollinger Band at $4.10 with the 20-day at $4.24 becoming resistance
which we are just below at midday.
Soybean trade is 1 to 3 cents lower at midday with trade surging back from
overnight weakness with flat to soft spread action as the export wire remains
quiet, and overnight technical issues that plagued trade seemingly resolved.
Meal is flat to $1.00 lower and oil is flat to 10 points higher. South America
has rains moving into much of central and southern Brazil and Argentina short
term, with dry pockets and high temps still a worry with the second week still
potentially showing broader improvement. Basis remains strong as we continue to
work to max out our logistics capacity to ship the needed export bushels with
freight issues remaining in play. The January chart has resistance at the fresh
high at the fresh high at 12.00 scored last week, with the upper Bollinger Band
at $12.16, with support the 20-day at $11.55 which we are back above at midday
with the lower Bollinger Band at 10.92 below that.
Wheat trade is 7 to 13 cents higher with trade surging back during the day
session with winter wheats leading as the overall rangebound action continues.
The dollar remains at the lower end of the range but hasn't shifted export
competitiveness yet. World export tenders continue to go to Black Sea origin
for the most part, with little change in overall conditions there going into
dormancy. The western plains look to mostly remain dry short term. Kansas City
is at 39-cent discount to Chicago on the March with active trade continuing,
with Minneapolis at -32. Kansas City March chart resistance is the 20-day at
$5.57 which we failed to hold late last week, and support is the lower
Bollinger Band at $5.41, which we tested before bouncing.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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