DTN Midday Grain Comments 10/11 11:18
All Grains Higher at Midday
Trade is sharply higher at midday across the board.
By David Fiala
DTN Contributing Analyst
The U.S. stock market is sharply higher with the Dow up 475. The dollar
index is 460 higher. Interest rate products are firmer. Energies are firmer
with crude up 1.05. Livestock trade is mixed. Precious metals are mixed with
gold down $18.00.
Corn trade is 12 to 14 cents higher at midday with support from weather and
trade after holding support in the post-report selloff yesterday with the
report losses reversed. Harvest will remain slow with the cold front moving
through. The ethanol margins have improved this week with broader harvest
needed to support production levels, with ethanol futures edging higher today.
Basis remains flat to weaker with anticipation of more inbound bushels soon.
South American corn planting is underway, with second-crop shipments out of
Brazil remaining active. The WASDE report raised yields 0.2 BPA to 168.4, vs.
166.8 expected, with production at 13.779 billion, down slightly from last
month on reduced harvested acres, and carryout at 1.929 billion down from 2.19
last month vs. expectation of 1.682 billion. On the December contract support
is at the 10-day at $3.88, and resistance the upper Bollinger Band at 3.99.
Soybeans are 11 to 13 cents higher at midday with support from report
numbers and reported trade progress supporting the market. Meal is 3.50 to
$4.50 lower and oil is 10 to 20 points higher. Crush margins remain good.
Economically US export competitiveness remains improved, but remains at a steep
currency disadvantage to South America with more China buying possible with the
trade deal. Bean basis is seeing some pressure from expanded harvest through
midweek but pace will likely slow again. South America has the beginnings of
planting but remains behind the normal pace so far. The WASDE report was
supportive with yields down 1 BPA from last month at 46.9 vs expectations of
47.2, and carryout at 460 million bushels vs. 640 last month, and 497 expected,
on production of 3.55 billion vs. 3.63 billion last month. On the November
chart support is the 200-day at $9.10 with the upper Bollinger band remaining
resistance at $9.36, the upper Bollinger band, which we are testing this
Wheat trade is 10 to 19 cents higher with Chicago trade leading at midday
with spillover from the row crops adding support along with aggressive short
covering. The Chicago/Kansas City December spread is 93 cents with choppy
action continuing with Kansas City and Chicago taking turns leading. Remaining
spring wheat harvest will likely be stopped with the incoming cold front. The
corn/hrw spread has widened back to 24 cents from 13 cents at the low this week
working wheat back out of rations. Export action continues to be dominated by
Black Sea origin. The WASDE report showed carryout at 1.043 billion bushels, up
from 1.014 last month, and vs. 1.01 expected. The December Kansas City chart
support is the $4.07-4.09 area where the 10,20, and 50-day moving averages are
clustered with the upper Bollinger Band at 4.16 as resistance which we are
testing at midday.
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 him on Twitter @davidfiala
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