DTN Midday Grain Comments 12/06 12:16
All Grains Higher at Midday
Double-digit midday gains are again seen for beans at midday, providing mild
support to corn and wheat.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow futures down 11. The
interest rate products are lightly mixed. The dollar index is 31 points higher.
Energies are mostly lower with crude down $1.20. Livestock trade is mostly
higher. Precious metals are lower with gold down $5.
Corn trade is 3 cents higher at midday and has been up around a nickel due
to spillover support from beans and light chart buying of its own. Outside
markets have crude down the dollar and stocks lightly higher giving light
outside market pressure. In the big picture corn did not follow beans higher
the past 2 months so although the fundamentals remain negative with the large
carryover traders are talking about possible fund buying showing up for corn.
Other traders were looking to sell morning strength looking for a turn-a-round
Tuesday. Momentum is flat at midday, but best guess is for active trade this
afternoon near the close. Chart support is the $3.52 1/2 to $3.54 1/2 area
where we find the 10-day, 20-day and 50-day moving averages. The channel trend
line resistance was at $3.61, which we are above, so notable midday chart
resistance is the upper Bollinger Band, then the $3.69 4-month high.
Soybean trade is around a dime higher at midday, meal is up $7 and bean oil
is up 5 points. Bean oil was up over 50 points early but has faded which has
limited upside in beans here around midday. Beans are 7-8 cents off the early
highs. The weekly export inspections were again extremely large yesterday
morning boosting futures; they were at 1.910 million tons. The export demand
has held up with the futures move above $10 but market bears argue supplies
remain burdensome. The biggest chance for upside in beans this month is South
American weather issues or simple short covering causing weather premium to be
added. For today South American weather saw little change in the forecasts. If
big export sales continue to show up, beans should have good support on light
breaks. On the January chart the 10-day at $10.36 is now support with
resistance at the $10.65 4-month high.
Wheat trade was mostly higher at midday with futures 1 to 3 cents higher
across the three markets. Wheat is seeing limited selling interest due to the
firmer corn and soybean trade. Moisture over the weekend was welcome for winter
wheat areas. The weekly USDA condition reports stop coming out in December, but
this moisture would have likely lead to an improvement. The market will watch
areas where the snow cover has melted and temperatures drop down this week.
Drops around zero or lower that can cause winter kill. On the KC March chart
support is at the $4.01 contract low printed last Thursday, resistance is at
the $4.21 10-day moving average which is the lowest major moving average.
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 Fiala on Twitter @davidfiala
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