DTN Midday Grain Comments

General Comments

The U.S. stock markets are higher with the DOW futures near 10 higher. The interest rate products are mixed. The dollar index is 33 points higher. Energies are higher, crude is up $0.15. Livestock trade is mostly higher. Precious metals are lower with gold down $8.

CORN

Corn trade is flat to 2 cents higher at midday with commercial buying support a move off the weaker trade overnight. Volume is expected to remain poor this week with the holiday trade. Corn basis remains stable to firm with reluctant farmer selling on this weakness. Ethanol margins remain under pressure with crude sinking to just over $40 per barrel, and unleaded remains at a sharp discount to ethanol futures limiting blender incentives, although there has been some improvement this morning. U.S. export competitiveness has improved but the market will want sustained progress before getting excited. Export inspections showed some improvement at 494,689 metric tons. On the 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.

SOYBEANS

Soybean trade is 1 to 3 cents lower with trade finding selling after the Argentina election indicates that ag export taxes may be lowered pushing more soybeans on to the world market. Much better support has surfaced during the day trade, and reversing off the fresh contract lows made this morning would be a good thing. Meal is flat to $1 higher, and oil is flat to 10 points lower. Trade made new contract lows on the front months this morning at $8.45. South American weather brings some rains late this week, and a wetter extended forecast for some areas. Soybeans basis has been fairly quiet in recent days, with no major moves yet. The weekly export inspections were 1.853 million metric tons, which strong but lower than recent weeks. On the January chart, first support is at the $8.45 contract low. Resistance is the 20-day moving average at $8.68.

WHEAT

Wheat trade is 3 to 8 cents higher across the three contracts this morning with commercial buying overcoming the strong dollar at midday. Spread trade is fairly stable this morning, but Kansas City has been able to gain a little vs. Chicago. Russian conditions should improve this week heading towards dormancy, with no major cold threats in the near term. The weekly export inspections were soft on the week at 271,335 metric tons, with conditions expected to show some slight improvement on the week. Resistance at the 10-day moving average at $4.64, with support the new lows at $4.49 made overnight in low volume.

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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