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DTN Midday Grain Comments 12/07 10:48
All Grains Higher at Midday
Wheat leads positive grain trade at midday.
By David Fiala
DTN Contributing Analyst
General Comments
The U.S. stock market indices are weak with the Dow futures down 220. The
interest rate products are mixed. The dollar index is 7 lower. Energies are
firmer with crude up $2.40. Livestock trade is mostly lower. Precious metals
are firmer with gold $7.70 higher.
CORN
Corn trade is 2 to 3 cents higher at midday with trade testing the upper end
of the range heading towards the weekend. The weekly export sales were good at
1.18 million metric tons which was near the upper end of the range of
expectations. Ethanol margins remain poor with production showing an increase
again last week despite little improvement to profitability. Corn basis should
likely fade with a firmer board the past week with more open weather likely to
help shipping. On the March chart we have held over the 20-,50-, and 100-day
moving averages at $3.77-$3.79, which is our chart support area with resistance
at the upper Bollinger Band at $3.88.
SOYBEANS
Soybean trade is 5 to 7 cents higher at midday with sideways action likely
to continue in the upper end of our range until we see more confirmation of
fresh sales. Meal is $1 to $2 higher and oil is flat to 10 higher. South
America continues to make good progress with early harvest approaching fast,
and more talk about further acre expansion in the future. Basis will provide
signals on the quantity of nearby cash business getting done with flat to
slightly firmer trade so far this week. The weekly export sales were better at
890,900 metric tons, meal was 287,300, and oil was 21,000 metric tons. January
support is at the weekly low at $8.97. Resistance is at the Monday high at
$9.35.
WHEAT
Wheat trade is 8 to 16 cents higher on the March contracts support from
better exports, and another flare-up in the Azov Sea overnight with Kansas City
trade leading. Russian exports have showed signs of slowing down. The weekly
export sales number was supportive at 711,000 metric tons, plus the USDA
announcing at HRW sale to unknown of 224,000 metric tons. The dry areas of
Europe are expected to catch up on moisture in the near term. Egypt has delayed
shipment on recent purchases, but it is not expected to be a lasting issue.
Iraq bought some U.S. wheat. Australian harvest should continue to make
progress in the near term. On the March Kansas City chart support is at the
20-day at $4.99 that we cleared this morning with the 50-day at $5.20 the next
round up.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
(BAS)
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