DTN Midday Grain Comments 10/12 11:58
Grains Higher at Midday
Trade is firmer across the board at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow futures up 230. The
interest rate products are mostly higher. The dollar index is 25 higher.
Energies are mixed with crude up 0.60. Livestock trade is mostly weaker.
Precious metals are mixed with gold down 5.40.
Corn trade is 2 to 4 cents higher, holding gains from Thursday, with more
spillover support from row crops so far. Cold weather is expected to persist
with the heaviest rain potential passed in most areas. Ethanol futures have
edged back above 1.30 at midday. Weekly export sales were solid at 1.01 million
metric tons. Corn basis is expected to stay sideways with wet weather limiting
weakness in some areas. The World Agricultural Supply and Demand Estimates
(WASDE) report was supportive vs. expectations with yield falling slightly to
180.7 bushels per acre, a bushel below expectations, with production falling
slightly to 14.778 billion bushels. Ending stocks were estimated at 1.813
billion bushels, which was 100 million bushels below expectations. On the
December chart, support is at the $3.67 50-day with resistance at our recent
high of $3.73. The 100-day is above it at $3.73 3/4.
Soybean trade is 7 to 10 cents higher with trade working to extend
post-report gains. Ongoing quality concerns after the storms are battling it
out with continued slow demand. Meal is narrowly mixed, and oil is 35 to 45
points higher. Soybean basis has found some footing with the delays, although
it remains abnormally wide with more focus on quality losses. Aggressive
discounts are seen along the river system. Crush margins remain strong. Weekly
export sales were poor for soybeans at 439,700, but good for meal and oil at
348,500 and 12,100. Early planting in South America is underway with the recent
weather pattern remaining intact. The WASDE report showed yield slightly higher
at 53.1 bpa with 600,000 fewer acres. Production was estimated at 4.690
billion, down slightly from last month, with carryout rising 40 million to 885
million. World stocks rose slightly to 110 million. On the November chart,
support is the 10-day at $8.62 with resistance the recent high at $8.76.
Wheat trade is 2 to 9 cents higher with early gains yet again with trade
looking to see if they can be sustained for once. The U.S. dollar has faded
back below 95 with some light buying today. World spring wheat harvest is
nearing completion, while winter wheat planting is ongoing with better
conditions in North America than Europe. Australia remains in the recent
weather pattern. Weekly export sales remain sluggish at 339,700 metric tons
with trade still focused on Russia's aggressive program. The WASDE report had
wheat carryout at 956 million, slightly above the average guess, and world
stocks at 261.2 million metric tons, just below the average guess. On the
December KC chart, we are just above at the 10-day and 20-day at $5.18 with the
lower Bollinger Band support at $5.09, and resistance the upper Bollinger Band
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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