DTN Midday Grain Comments 12/12 11:02
Trade Mixed at Midday
Trade is mixed at midday ahead of the December WASDE report.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher at midday with the Dow futures up
125 points. The interest rate products are lower. The U.S. dollar index is 30
points higher. Energies are lower with crude down 40 cents. Livestock trade is
mixed. Precious metals are mixed with gold down $7.50.
Corn trade is flat to 1 cent higher at midday with quiet action ahead of the
WASDE report at 11 a.m. CST. Ethanol margins look to remain steady Tuesday with
blenders seeing the most benefit, with ethanol futures sliding lower again.
Basis and carry likely remain steady to start the week. Corn in South America
is mostly two to three weeks out from pollination, starting with an improved
extended forecast in the medium term. The December WASDE report will be
released at 11 a.m. CST with little change expected from the November report
with domestic yield and production numbers not adjusted again until January.
The carryout guess is 2.479 billion bushels (bb) domestically, and 202.8
million metric tons (mmt) for the world, and Brazil at 92.4 mmt of production,
and Argentina at 41.8 mmt tons. The USDA announced 152,000 metric tons (mt) of
corn sold to Mexico. On the March chart support is the contract low at $3.48
1/4 printed Monday with resistance at the $3.53 20-day moving average then the
50-day moving average at $3.59.
Soybean trade is 2 cents to 4 cents lower ahead of the report in quiet
action with trade holding just above support. Meal was $1 to $2 lower and oil
is 10 cents to 20 cents lower. South American weather looks better with rains
expected in the next seven days for some of the driest areas and better
coverage after that heading towards Christmas, but La Nina will remain a
concern. The WASDE report is expected to show little change for soybeans as
well with domestic carryout at 439 million bushels (mb), world carryout at 97.7
mmt, Brazil production at 108.4 mmt, and Argentina 56.3 mmt. The export wire
has been more active in recent days, with 168,300 mt of soybeans sold to
unknown, and 492,000 mt switched from unknown to China. On the January chart
support is the 200-day at $9.76. Resistance is at the $9.93 10-day.
Wheat trade is narrowly mixed at midday with trade scraping along the lower
end of the range ahead of the report. The Plains look to remain dry with above
normal temperatures returning for the most part. The Australian harvest will be
nearing effective completion soon. Russian remains the dominant origin in the
world export markets, with the recent dollar rally adding to that advantage,
along with Argentina capturing business to Brazil and Mexico. The WASDE report
is expected to show larger Canadian production and lower Australian with
domestic carryout at 939 mb, and world stocks at 267.2 mmt. On the March Kansas
City contract, chart support is the $4.10 1/2 fresh contract low scored on
Monday, with the 20-day at $4.31 noted chart resistance.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Advisor.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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