DTN Midday Grain Comments 11/12 11:01
All Grains Higher at Midday
Kansas City wheat is the midday leader, with the rest of the grains firming.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 60. The dollar index is 16
higher. Interest rate products are weaker. Energies are mixed with crude up
$0.20. Livestock trade is mixed with hogs leading. Precious metals are weaker
with gold down $4.50.
Corn trade is 2 to 3 cents higher with trade working to hold the lower end
of the range, and to find some buying amid oversold conditions with support
from wheat. Harvest will be slowed the first part of the week with the cold
front bringing some snow before opening up again the second part of the week
with much of the areas south of 1-80 nearing the finish line and above-normal
temps for most to close the week. Ethanol margins remain stable, with ethanol
futures flat, helping to support blenders with unleaded still near the recent
highs. Basis should see more pressure as harvest progresses as we move to the
back half nationally. South America should see areas of improvement as planting
progresses, especially in Brazil. Weekly crop progress should show harvest near
2/3rds complete nationally, and export inspections showed improvement to
560,105 metric tons. On the December contract support is the $3.71 lows from
October, with resistance the spike high from Friday at $3.83 3/4.
Soybeans is flat to 1 cent higher with trade chopping around at midday after
the heavy selling to start the week with the improved South American weather,
and trade concerns with the Hong Kong flare up along with oversold conditions.
Meal is flat to $1.00 higher, and oil is 30 to 40 points lower. The real has
surrendered all of the recent gains again after the release of former President
Lula, hurting U.S. competitiveness, with the expectation of greater short-term
sales out of Brazil. Bean basis should see pressure start to fade with quiet
action to start the year. South America should make more progress through the
week with improved weather, and Brazil heading towards the planting
homestretch. Weekly export inspections remain strong at 1.331 million metric
tons. Weekly crop progress should show harvest past 80% complete. On the
January chart support is $9.00 after trade broke below the lower Bollinger Band
at $9.18 this Monday.
Wheat trade is 4 to 8 cents higher with Kansas City leading again this
morning as trade has bounced off another test of support to start the week,
with Chicago finding strong buying during the day session as well. The
Chicago/Kansas City December spread is 83 cents with narrower action, but
bouncing back from a multi-week low scored this a.m. The corn/HRW spread has
widened back to 56 cents, keeping wheat out of rations. Russian values remain
elevated with Australia dry, but the U.S. is still struggling to capture a
larger share, with the dollar remaining at the upper end of the range. Weekly
export inspections improved to 528,875 metric tons. Weekly crop progress should
show steady conditions, with planting almost complete and emergence lagging.
The December Kansas City chart support is the 20-day at $4.23, which we are
just above overnight then the lower Bollinger Band at $4.15 below that with the
upper Bollinger band at $4.32 as resistance which we have tested this a.m.
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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