DTN Midday Grain Comments 12/06 10:53
Grains, Soybeans Lower at Midday Monday
Corn futures are 5 to 6 cents lower; soybean futures are 7 to 9 cents lower;
wheat futures are 1 to 7 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 600 points. The U.S. Dollar
Index is 25 points higher. Interest rate products are lower. Energies are mixed
with crude up 2.10. Livestock trade is mostly lower. Precious metals are mixed
with gold down 3.00.
Corn futures are 5 to 6 cents weaker at midday Monday with trade remaining
squarely in the middle of the existing range as there is little fresh news to
start the week and overall softer ag action. Ethanol margins have narrowed with
the energy move lower with concerns about ethanol flat price out past Christmas
as well with driving demand remaining strong nearby and natural gas values
fading again. Basis should remain steady to firmer short term with fall
fieldwork on the homestretch with the recent open weather. Weekly export
inspections were in line with recent weeks at 758,169 metric tons (mt). On the
March contract we have support at the 20-day moving average at $5.78 which we
are testing at midday, then the upper Bollinger band at $5.94 as further
Soybean futures are 7 to 9 cents lower at midday after early strength faded
with weekend rains in South America and tepid product action. Meal is $6.00 to
$7.00 lower and oil is 35 to 45 points higher. South America looks to continue
short-term progress with issues remaining limited for now with short-term
dryness expected in the southern growing areas for the balance of the week.
Crush margins remain solid but further product weakness would limit enthusiasm.
Weekly export inspections remain solid at 2.247 million metric tons (mmt) with
the daily wire showing another 130,000 mt booked to China. On the January
soybean chart, we bounced back above the 20-day moving average at $12.46 last
week with further resistance the Upper Bollinger band at $12.94.
Wheat futures are 1 to 7 cents lower at midday with spring wheat retaking
the lead as trade works along the lower end of the range with little fresh news
overall. The dollar is just above 96, continuing to hold the upper end of the
range with calmer trade. Plains weather looks little changed in the short term
with longer-term dry concerns for the Southern Plains heading towards dormancy
with mixed forecasts in Australia in the short term as harvest expands with
various Black Sea area concerns still in place. Spring wheat is firmer vs.
Chicago, moving the premium to $2.20 on the March, with KC at a 18-cent premium
in weaker action so far. Weekly export inspections remain a bit soft at 245,963
mt. KC March chart resistance is at the 20-day moving average at 8.36 with the
recent low at $8.15 as the first level of support.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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