DTN Midday Grain Comments 12/14 11:34
Soybeans, Wheat Lower at Midday
Corn leads at midday, with soybeans and wheat drifting lower.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are softer with the Dow futures down 360. The
interest rate products are weaker. The dollar index is 40 higher. Energies are
weaker with crude down $1.30. Livestock trade is mixed. Precious metals are
lower with gold down $4.10.
Corn trade is 1 to 2 cents higher at midday with action remaining just below
the recent highs scored midweek. Corn basis looks to be flat in the near term
with better weather improving movement potential. Ethanol margins remain under
pressure with energies remaining at the lower end of the range and ethanol
futures remaining flat. USDA announced 125,000 metric tons of corn sold to
Japan, and there is talk China could be in the import market after the first of
the year. Milder weather should allow harvest to wrap up overall. On the March
chart the 20,50, and 100-day moving averages at $3.78-$3.80 is our chart
support area with resistance at the new high scored at $3.87 3/4.
Soybean trade is 1 to 3 cents lower with trade coming back from the 6-8 cent
lower trade earlier in the overnight session with overall rangebound action
still continuing. Meal is flat to $1 higher and bean oil is 10 to 20 points
lower. South America continues to make good progress with early harvest
approaching fast with a few dry pockets in Brazil drawing more worry. Basis
will provide signals on the quantity of nearby cash business getting done with
flat to slightly firmer trade so far this week. China purchases look to be in
the 1.5 to 2.0 million metric tons the last couple days with 300,000 more
confirmed today, along with 130,000 to unknown. Big picture, US origin is the
economic choice for China in the three-month horizon, but once the bulk of the
2019 Argentine and Brazilian crop is harvested that likely will not be the
case. January support is the 20-day at $8.96, with the 10-day at $9.11 just
above the market with the recent high at $9.29 above that.
Wheat trade is flat to 4 cents lower with trade holding the recent gains
with improving exports helping to support the market, and spread unwinding
favoring the Kansas City contract. The dollar has firmed sharply this morning
with trade remaining near the upper end of the range. Australian harvest will
continue in the near term. North American winter wheat is seeing milder
weather, helping late emergence. Russian/Ukrainian tensions have ramped up
again. On the March Kansas City chart support is at the 50-day at $5.18 that we
closed above yesterday with the upper Bollinger Band at $5.21 just above the
market and the 100-day the next round up at $5.44.
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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