DTN Midday Grain Comments 12/12 11:05
Midday Trade Broadly Firmer With Wheat Leading Futures Higher
Corn futures are 6 to 8 cents higher; soybeans are 4 to 6 cents higher;
wheat is 9 to 14 cents higher.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 150. The dollar index is 30
higher. Interest rate products are firmer. Energies are firmer with crude up
.50. Livestock trade is mixed with hogs leading. Precious metals are flat to
lower with gold down 3.70.
Corn futures are 6 to 8 cents higher with good buying during the day
session, reversing Wednesday's losses with support from the fifth largest
export sale on record hitting the daily wire with 1.6 million metric tons (mmt)
heading to Mexico, with two-thirds of that as old-crop sales. Ethanol margins
have narrowed with the stocks build reported Wednesday and firmer corn
Thursday, with ethanol futures able to edge higher this morning, while blenders
remain in a strong position. Open weather should allow for more clean-up
harvest. Weekly export sales were better at 873,500 metric tons (mt). Basis has
held up well with some strength showing up at processors again. On the March
contract, support is the fresh low at $3.71 1/4, with the contract lows at
$3.66 below that, with the 20-day at $3.78 resistance, which we are testing at
Soybean futures are 3 to 5 cents higher with trade struggling to clear the
$9.00 area with seasonal pressure helping to cap gains ahead of a big weekend
for trade. Meal is flat to $1.00 lower, and oil is 60 to 70 points higher. The
real remains cheap vs. the dollar with Brazilian weather still in good shape;
Argentina is more mixed, short term. Bean basis has moved to a more sideways
short-term trend. Weekly export sales were mixed at 1.05 mmt of beans, 238,600
mt of meal, and 30,000 of oil. 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 $8.93, with the upper Bollinger band at 9.21.
Wheat futures are 9 to 14 cents higher with the winter wheats catching a bid
during the day session with support from world values along with short
covering. The Chicago/KC March spread is back to 86 cents, narrowing from the
high, with KC gaining sharply the last two days before flattening Thursday.
Chicago is also holding a 5-cent premium to Minneapolis, which has widened
Thursday after sharply contracting. The dollar remains rangebound. Export
business remains quiet with Russian values rising again and some midweek
tenders. The forecast has some moisture for Kansas along with warmer temps.
Weekly export sales showed improvement at 502,700 mt. The March KC chart
support is the lower Bollinger band at $4.22, and resistance the 20-day at
4.34, which we are above at midday.
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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