DTN Midday Grain Comments 12/10 10:51
Grains Mixed at Midday
Soybeans lead quiet pre-report trade.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is mixed with the Dow down 10. The dollar index is 17
lower. Interest rate products are firmer. Energies are firmer with crude up
$0.24. Livestock trade is mostly higher. Precious metals are mostly higher with
gold up 2.00.
Corn trade is narrowly mixed with quiet trade at the lower end of the range
continuing ahead of the report this a.m. On the report, production is expected
to be unchanged from last month, with the domestic carryout at 1.919 billion up
just slightly from last month. Ethanol margins have remained steady with corn
and ethanol futures sideways, and unleaded at the upper end of the range
overall boosting blender margins. Basis has held up well with some strength
showing up at processors again. The last weekly report showed harvest at 92%
complete vs. 100% on average. On the March contract, support is the lower
Bollinger Band at $3.73 which we have held just above, with resistance the
20-day at $3.79.
Soybeans trade is 2 to 4 cents higher at midday, hanging right at $9.00 with
trade trying to consolidate gains ahead of the report with reports of a delay
in further tariffs with China. Meal is flat to $1.00 higher and oil is 5 to 15
points higher. The real remains cheap vs. the dollar with Brazilian weather
still in good shape, with Argentina more mixed short term and coming off a dry
week. Bean basis has moved to a more sideways trend short term with the futures
rally likely to soften basis in some areas this week. On the WASDE report
production is expected to be unchanged, with domestic carryout at 476 million
bushels, inline with last month. January chart support is the lower Bollinger
band at $8.65 which we are finally pulling away from, with trade just above the
20-day at $8.96, with the upper Bollinger Band at 9.27.
Wheat trade is narrowly mixed at midday with trade seeing choppy action so
far. The Chicago/KC March spread is back to 97 cents near the highs. Chicago
also holding a 97 cent premium to Minneapolis which has narrowed to start the
week. The dollar remains rangebound. Export business remains quiet with Russian
values rising again and some midweek tenders. The forecast dries the Plains out
short term, with little change to world conditions north and south this week.
The WASDE report is expected to show carryout at 1.01 billion, down just
slightly from last month. The March KC chart support is the lower Bollinger
Band at $4.23, and resistance the 20-day at 4.33.
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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