DTN Midday Grain Comments

General Comments

The U.S. stock markets are mixed. The interest rate products are flat to higher. The dollar index is 22 points lower. Energies are higher with crude up $1.40. Livestock trade is mostly lower. Precious metals are higher with gold up $8.

CORN

Corn trade 2 cents lower in quiet session with only a 3 cent range through midday. Volume is expected to remain poor this week with the Thanksgiving Holiday trade and limited possible material market news. Basis remains stable to firm early in the week, with ethanol margins slightly improved with a rebound starting to develop in the energy complex. US export competitiveness has improved but the market will want sustained progress before getting excited. It appears doubtful the USDA would increase any usage numbers on the December monthly Supply and Demand report. On the December chart, first support is the 10-day moving average at $3.62, and then the recent low at $3.56, with resistance that 20-day moving average at $3.69. Expect buys stops above the high yesterday, then above the 20-day if some buying shows up in this thin trade to take us there. That could give us a little more exiting trade, but at this juncture the market does not act like it wants to do much here. For the holiday we will have a normal close tomorrow then a noon close on Friday. It appears the overnight trade will not trade Thanksgiving night with trade beginning Friday on the day session open.

SOYBEANS

Soybean trade is 2 cents higher; meal is down $1 and bean oil up 50. Outside market strength is supporting bean oil and crude which has beans higher. Soybean trade has been slow with only an 8 cent range up through midday. South American weather brings some rains late this week, and a wetter extended forecast for some areas but some holes are likely to remain. This was behind the weakness early yesterday. As of midday the rebound yesterday has carried into today for beans. Soybeans basis has been fairly quiet in recent days, with no major moves yet. The USDA switched some sold soybeans from unknown to China. If Argentina drops export taxes more soybeans could move onto the world market in the near term. On the January chart, support is at the $8.45 contract low. Resistance is the 20-day moving average at $8.69. Monday was an outside day with a higher close for beans, plus a key reversal due to a close at a three-day high. So if we can put in some new daily highs there is a positive chart story here at midday to generate some short covering and fresh buying.

WHEAT

Wheat trade is 5 to 7 cents lower following improved crop conditions in the U.S. along with spillover weakness from corn. The weaker dollar has limited downside. Spread trade is fairly stable, but Kansas City has been able to gain a little vs. Chicago although it remains at a steep discount. Russian conditions should improve this week heading towards dormancy, with no major cold threats in the near term. Winter wheat conditions improved 1% to 53% good to excellent with most of the improvement in soft winter wheat growing areas. On the December Kansas City chart support is at the new contract low printed yesterday at $4.49 with resistance at the $4.73 20-day moving average.

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

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