DTN Midday Grain Comments 12/06 11:06
Grains Mixed at Midday
Soybeans lead at midday with trade giving back early gains.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 320 higher. The dollar index
is 40 higher. Interest rate products are firmer. Energies are lightly firmer
with crude $0.60 higher. Livestock trade is mostly higher. Precious metals are
mostly lower with gold down 18.80.
Corn trade is 1 to 2 cents lower at midday with trade turning lower during
the day session as early buying evaporates again. Ethanol margins have remained
steady with the blenders gaining the benefit of the crude and unleaded move
this week while ethanol futures remain sideways. Basis has held up well with
some strength showing up at processors again. The USDA reported 245,872 metric
tons of corn sold to Mexico. On the March contract support is the lower
Bollinger band at $3.74 which we have held just above, with resistance the
20-day at $3.80.
Soybeans are 3 to 4 cents higher at midday with support from short covering
and reports that China was going to allow further tariff-free imports of
soybeans but early gains failed to hold again. Meal is $2.00 to $3.00 lower and
oil is 60 to 70 points higher with meal moving back below $300 a ton. The real
remains cheap vs. the dollar with Brazilian weather still in good shape, with
Argentina more mixed. Bean basis has moved to a more sideways trend short term
with pockets of firmness showing up on the break. January chart support is the
lower Bollinger Band at $8.63 which we are finally pulling away from, with
resistance well above the market at $8.98 where the 20-day moving average,
along with exceptionally oversold conditions starting to ease.
Wheat trade is flat to 4 cents lower with Minneapolis trade leading at
midday with trade boring back into support levels. The Chicago/KC March spread
is back to 85 cents. Chicago also holding a 6 cent premium to Minneapolis which
has narrowed sharply this week. The dollar rebounded today, adding pressure as
well. 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. The March KC chart support is the lower Bollinger Band at
$4.23, and resistance the 20-day at 4.35.
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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