DTN Midday Grain Comments 12/11 11:22
Grains Mixed at Midday
Narrowly mixed midday trade is seen with some chart buying being met with
fundamental selling due to limited fresh supportive news.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow futures up 120. The
interest rate products are mixed. The dollar index is 18 higher. Energies are
firmer with crude up $1.15. Livestock trade is mixed. Precious metals are flat
to higher with gold flat.
Corn trade is flat to 1 cent lower in quiet trade midday ahead of the WASDE
report release at 11 AM Ethanol margins remain poor with a flat start to the
week. Corn basis looks to be flat in the near term. The December WASDE report
will be out this morning, but little change is expected from November with the
January final numbers the longer term focus. The average 2018-19 domestic
carryover guess is 1.744 billion bushels versus 1.736 on the November report,
and the world number is at 308.4 million metric ton versus the surprise 307.5
November number due to the big increase in China's carryover number. On the
March chart the 20-, 50-, and 100-day moving averages at $3.77-$3.79 is our
chart support area with resistance at the upper Bollinger Band at $3.88.
Soybean trade is 2 to 4 cents higher at midday with trade remaining within
the last week's trade. Meal is flat to $1.00 higher and oil is 5 to 15 points
higher. South America continues to make good progress with early harvest
approaching fast with a few dry pockets starting to appear and CONAB holding
production at 120 million metric tons vs. private sources at 130 last week.
Basis will provide signals on the quantity of nearby cash business getting done
with flat to slightly firmer trade so far this week with the extent of nearby
Chinese business still very foggy with more promises of confirmation of details
this week. The WASDE report is expected to have the domestic 2018-19 carryover
at 938 million bushels versus 955 on the November report and the world
carryover at 113.2 mb versus 112.1 last month. January support is at the 10-day
at $9.01. Resistance is the 200-day at $9.39.
Wheat trade is narrowly mixed at midday with quiet trade. Russian exports
have showed signs of slowing down in recent days, with more signs of U.S.
business especially into the first quarter of 2019. The dollar strength has
relaxed overnight. The report today will reconfirm large world numbers but
should show a smaller harvest in Australia given last weeks comments. The
average trade guess for the WASDE is for the 2018-19 domestic carryover to be
at 969 million bushels versus 949 million a month ago. The world number is
expected to be at 267.3 versus 266.7 million metric ton last month. On the
March Kansas City chart, support is at the 20-day at $4.99 that we cleared on
Friday 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 firstname.lastname@example.org
Follow him on Twitter @davidfiala
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