DTN Midday Grain Comments 11/28 11:06
Grains Mixed at Midday
Wheat is firm, row crops mixed on an interesting Thanksgiving Friday session.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 60. The
interest rate products are higher. The dollar index is 60 higher. Energies are
sharply lower with crude down nearly $5. Livestock trade is mixed. Precious
metals are lower with gold down $17.
Corn trade is sitting 1 to 2 lower at midday. Crude oil was down as much as
$6 this morning which had corn around 4 lower out of the gates, but trade
around midday has been steady to 2 lower. OPEC left production output unchanged
in reaction to the recent drop in price which is negative. Chart pressure and
long liquidation is also part of the energy weakness. The RBO (unleaded gas)
contract is down over a dime a gallon which should mean lower prices at the
pump. January Ethanol futures are around 4 cents lower which has ethanol
futures only 13 cents below unleaded. This is too close to gas and discourages
ethanol usage/blending. This in turn can lower ethanol production margins which
is a little negative for corn for the moment. The weekly export sales were just
above expectations at 944,900 tons which has limited upside. Market bears argue
the number was just larger ahead of a holiday week. On the March corn chart
trade has support at the 10-day and 20-day moving averages at $3.86-87 area
with the $4.01 November high chart resistance. Expect sell stops below $3.86.
Soybean trade is 9 to 13 lower at midday, meal is off $5 and bean oil is
down over 100 points. The sharply higher dollar and sharply lower crude oil is
notable items on this holiday trade day. These items supplied negative market
influence but it could also help trigger chart selling. The 10-day moving
average is at $10.30 on the January contract, if we get below this level in
thin trade today, let's not be surprised to see a bigger move. Crush margins
remain strong domestically and export news great, so the weekly and monthly
demand items remain very good. Soybean basis has firmed this week illustrating
the great demand items. The weekly export sales listed soybean sales at 1.485
million tons, meal sales were only 22,300 tons and bean oil sales were good at
35,600 tons. The nearby chart support was at the 100-day moving average at
$10.37, which we are below at midday.
Wheat trade is 10-14 cents higher at midday due to chart support and light
fundamental worries. The weekly export sales were in line with expectations at
431,500 tons. Most wheat contracts saw new highs this morning which picked up
buy stops and some chart buying. Without some fresh news the market may find a
tough time generating news to support an upside breakout. But in thinner
holiday trade it can always be interesting when emotional short covering or
long liquidation occurs. With whet at new highs, and beans and corn challenging
some support areas at midday, this could be an interesting noon close today! On
the March KC chart support we moved above the 100-day moving average, currently
at $6.25, for the first time since June. This level is now support and the next
major moving average to the upside is $6.85 the 200-day. The high today is 85
cents above the Oct. 1 low.
David Fiala is a DTN contributing analyst and the president of FuturesOne
and a registered Trading Adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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