DTN Midday Grain Comments 12/06 11:31
Grains Mostly Lower at Midday
Grain trade is mostly lower at midday in slow action.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are higher with the Dow futures up 150. The interest
rate products are lower. The dollar index is 7 higher. Energies are higher,
crude is up $0.25. Livestock trade is lower. Precious metals are flat to higher
with gold up $1.
Corn trade is flat to 3 lower in quiet midday trade. Outside markets are
slightly supportive after the better-than-expected jobs report. The 50-day up
at $4.43 is chart resistance and the 20-day at $4.31 is now support which we
are testing at midday. Trade was able to garner consecutive closes above the
20-day moving average, which is a positive technical sign. A third consecutive
close would be encouraging. Ethanol margins remain very strong, as do blender
margins. Basis has been stable this week, but further tightening maybe fairly
hard to come by in the near term.
Soybean trade is 5 to 10 lower across the board in soft midday trade, with
meal $2.50 to $3.50 lower, and oil is flat to 10 higher. January soybean chart
support is at $13.10, the 20-day, then $12.92, the 50-day. Chart resistance is
at the recent high up at $13.46. The chart action again today suggests
continued sideways action ahead of Tuesday's report. South American weather
continues to look fine in the near term. Trade will continue to watch for new
sales or cancellations with 384,150 metric tons of new sales announced today.
Wheat trade is flat to 2 lower in quiet trade at midday as wheat looks to
halt its break from the middle of the week. The softer dollar will be
supportive as well as the strength in corn if it can hold into the weekend.
Trade will need to close stronger today to avoid more chart damage. $6.47 3/4
is the next support which is the September March contract low. The weekly sales
were poor at 229,200, with interest shifting to Canada and Australia, but still
strong overall to Asian destinations. Fresh weather threats appear limited at
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Trading Adviser
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