DTN Midday Grain Comments 10/17 11:10
All Grains Higher at Midday
Firmer trade at midday, led by wheat.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is flat with the Dow up 10. The dollar index is 38
lower. Interest rate products are firmer. Energies are weaker with crude down
$0.20. Livestock trade is weaker. Precious metals are firmer with gold up $3.80.
Corn trade is 2 to 2 3/4 cents higher at midday with trade finding buying
with supportive trade and Brexit news overnight. Harvest will remain slow but
should show progress through the end of the week before wetter weather returns
to the east with beans getting more attention this week. The weekly ethanol
report showed production 8,000 barrels per day, and stocks 873,000 barrels,
with ethanol futures slightly higher but still well of the recent highs. Basis
remains flat to weaker with anticipation of more inbound bushels soon. South
American corn planting but is running behind normal. Weekly export sales will
be delayed until Friday. On the December contract support is at the 10-day at
$3.91 which we are testing overnight, then the 20-day at $3.85, and resistance
the upper Bollinger Band at $4.02.
Soybeans are 4 to 6 cents higher with trade bouncing on the positive trade
hopes and Brexit, but following the pattern of being unable to hold the recent
highs. Meal is 2.00 to 3.00 higher and oil is 5 to 15 points higher. Crush
margins remain solidly positive. The real is back to the low end of the range
vs. the dollar but reversed late yesterday and is gaining this morning. Bean
basis is should see pressure as combines roll through midweek before rains
return. South America should make more progress this week and into the second
half of the months with some weather issues remaining and planting pace solidly
behind. On the November chart support is the 10-day at $9.27 with the upper
Bollinger Band at $9.48 as resistance.
Wheat trade is 3 to 8 cents higher with strength carrying over from
yesterday with the Chicago trade leading but we have faded a bit at midday. The
Chicago/Kansas City December spread is 90 cents with choppy action continuing
with mostly steady to slightly wider. Remaining spring wheat will likely not be
cut at this point. The corn/HRW spread has widened back to 36 cents from 13
cents at the recent low, working wheat back out of rations. Export action
continues to be dominated by Black Sea origin with more sales to Egypt and
neighboring countries yesterday. The December Kansas City chart support is the
$4.07-4.15 area where the 10-, 20-, and 50-day moving averages are clustered
with the 100-day at 4.40 the next level up with the upper Bollinger Band right
at midday trade at $4.28.
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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