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DTN Midday Grain Comments     12/04 10:55

   Grains Mixed at Midday

   Soybeans lead mixed trade at midday. 

By David Fiala
DTN Contributing Analyst

 General Comments



   The U.S. stock market is firmer with the Dow up 200. The dollar index is 17 
lower. Interest rate products are firmer. Energies are mostly higher with crude 
$2.15 higher. Livestock trade is mostly lower. Precious metals are mixed with 
gold down $6.60.


   Corn trade is 3 to 4 cents lower with trade failing at resistance at $3.82 
yet again, with spread unwinding vs. soybeans adding pressure at midday. The 
weekly ethanol report showed production up 1,000 barrels per day, with stocks 
362,000 barrels higher and stocks are slightly lower. Basis has held up well 
with the slow pace of harvest so far with another storm stopping remaining 
harvest for now, but warmer weather will return for many into midmonth. South 
America should see areas of improvement as planting progresses, with a drier 
week in Argentina expected through the weekend. On the March contract support 
is the lower Bollinger Band at $3.74, with resistance the 20-day at $3.81 which 
we failed again at. 


   Soybeans are 6 to 8 cents higher with the pattern of overnight strength 
still intact, while we wait to see if trade can sustain during the day session 
after finally holding on to a positive session yesterday with good progress at 
midday. Meal is 2.00 to $3.00 higher, and oil is 10 to 20 points higher. The 
real remains cheap vs. the dollar although slightly firmer overnight with the 
export wire seeing 20,000 metric tons of oil to Morocco. Bean basis has moved 
to a more sideways trend short term with pockets of firmness showing up on the 
break. The January chart support is the lower Bollinger Band at $8.62, which we 
are finally pulling away from, with resistance well above the market at $9.03 
where the 20-day moving average, along with exceptionally oversold conditions 
starting to ease.


   Wheat trade is 1 cent lower to 3 cents higher with the Kansas City trade 
leading over at midday after the higher protein wheats gained solidly vs. the 
Chicago yesterday and today. The Chicago/Kansas City March spread is back to 86 
cents. Chicago also holding a 9 cent premium to Minneapolis which has narrowed 
sharply this week. The dollar remains rangebound but is starting to shift lower 
again. Export business has been quiet so far this week. The forecast dries the 
Plains back out short term, with the Black Sea seeing better short-term action, 
while Australia's crop is estimated to be off about 20% on the year. The March 
Kansas City chart support is the 20-day at $4.35, and resistance the upper 
Bollinger Band at $4.47.

   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


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