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DTN Midday Grain Comments     10/06 11:46

   Grains Higher at Midday

   Grain trade is seeing gains at midday.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock markets are mixed with the Dow futures up 20 points. The 
interest rate products are higher. The dollar index is 55 points lower. 
Energies are higher with crude up $2. Livestock trade is higher to sharply 
higher. Precious metals are higher with gold up $10.


   Corn trade is 5 cents higher and near the daily highs at midday due to fund 
buying and spillover support from beans. Trans Pacific Partnership optimism has 
been talked about in the news as a positive demand item, but others argue the 
strength today is light short covering and new buying. Seasonally we should be 
in search of a harvest low, but the market has held a firmer trend over the 
past 5 weeks. December corn is flirting with the 200-day and highest major 
moving average at midday at $3.99. The $4.02 2-month high is the next level of 
resistance where buy stops are lightly to be sitting above in volume. The 
question with a rally now is with good supplies domestically and globally of 
feed grains will demand suffer if prices go higher. The Linn Group released a 
number closer to the August ProFarmer number Monday which could be noted as a 
supportive factor here today. Their production estimate was just under 13.3 
billion using a 164.7 yield. On the nearby December chart nearby support is the 
100-day moving average at $3.88, then the 20-day at $3.84. Resistance is at the 
200-day and two-month high mentioned above. Short covering could occur here as 
part of position squaring ahead of the WASDE report due out Friday.


   Soybean trade is up 7 cents at midday, meal is up $1 and bean oil is up 25 
points. Trade was lower overnight due to a bump in crop ratings which is pretty 
rare for October. But as of midday the market shook off that news and we are 
back in the upper part of our range since late August. The soybean harvest was 
as expected at 42% complete versus the 32% average. The weather should allow 
the soybean harvest to be past the half way point by the report day on Friday. 
So market bulls could argue the harvest lows are in since we are past the 50% 
mark of the 2015 harvest. Market bears will continue to point to burdensome 
global supplies with no drop in South American Plantings this fall and winter 
expected versus last year. Soybean conditions improved by 2% to 64% good to 
excellent which is still down from 73% a year ago, but a seasonal item we 
usually do not see. The Linn Group gave a 47.5 bushel yield with a 3.898 
billion bushel production estimate yesterday which was not too far off from the 
other private estimates this past week. On the November chart the contract low 
at $8.53 1/4 is long term support with the 20-day moving average at $8.79 
nearby support. Upside resistance is at the $8.99 50-day then the $9.02 high 
seen last week. 


   Wheat trade is up 7 to 11 cents at midday which has it near the daily highs. 
Spillover support from the row crops and position squaring leading to short 
covering appears to be occurring today. Wheat has some upward momentum in place 
since September. Winter wheat plantings feel behind normal coming in at 49% 
versus the 51% average on the weekly report Monday afternoon. Focus on corn and 
soybean harvest activity and the low wheat prices may limit winter wheat 
plantings this month. We could argue here winter wheat is rallying to buy a few 
more acres here. On the Kansas City December chart support is at the 10-day at 
$5.01 and 20-day moving average at $4.93 with resistance at the $5.15 
seven-week high reached this morning then the $5.33 100-day moving average. 

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered trading adviser.
David Fiala can be reached at 
Follow David Fiala on Twitter @davidfiala


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