DTN Midday Grain Comments 12/05 11:05
Grains Mixed at Midday
Soybeans lead mixed trade at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow down 30. The dollar index is 20
lower. Interest rate products are firmer. Energies are lightly firmer with
crude $0.20 higher. Livestock trade is mostly lower. Precious metals are firmer
with gold up 2.70.
Corn trade is flat to 1 cent higher at midday with trade back to the middle
of the recent range after the pull back yesterday with little other fresh news
so far this week. Ethanol margins remain steady with the blenders gaining the
benefit of the crude and unleaded move this week while ethanol futures have
been mostly sideways. Basis has held up well with some strength showing up at
processors again. South America should see areas of improvement as planting
progresses, with a drier week in Argentina expected through the weekend. Weekly
export sales were rangebound at 546,115 metric tons. On the March contract
support is the lower Bollinger Band at $3.74, with resistance the 20-day at
$3.81 at which we failed again.
Soybeans are 6 to 8 cents higher at midday with trade finding follow-through
buying after the strong close yesterday as we ease off the extremely oversold
conditions along with 245,000 metric tons of soybeans sold on the daily wire
between old and new crop. Meal is $5.00 to $6.00 higher and oil is flat to 10
points higher with meal moving back above $300 a ton. The real remains cheap
vs. the dollar although with early week gains fading again. Bean basis has
moved to a more sideways trend short term with pockets of firmness showing up
on the break. Weekly export sales were soft for the Holiday week at 683,783
metric tons of soybeans, 181,050 of meal, and 10,781 of oil. January chart
support is the lower Bollinger Band at $8.61 which we are finally pulling away
from, with resistance well above the market at $9.00 where the 20-day moving
average, along with exceptionally oversold conditions starting to ease.
Wheat trade is 3 cents lower to 3 cents higher with Minneapolis trade
leading at midday with trade further consolidating in the higher range. The
Chicago/Kansas City March spread is back to 85 cents. Chicago also holding a 6
cent premium to Minneapolis which has narrowed sharply this week. The dollar
remains rangebound but is starting to shift lower again. Export business has
been quiet so far this week. The forecast dries the Plains back out short term,
with little change to world conditions north and south this week. Weekly export
sales were softer again at 228,086 metric tons. The March Kansas City chart
support is the 20-day at $4.35, and resistance the upper Bollinger Band at
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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