DTN Midday Grain Comments 12/10 11:32

DTN Midday Grain Comments 12/10 11:32

Beans, Wheat Lower at Midday

Narrowly mixed midday trade is seen with some chart buying being met with
fundamental selling due to limited fresh supportive news.

By David Fiala
DTN Contributing Analyst

General Comments

The U.S. stock market indices are weak with the Dow futures down 420. The
interest rate products are weaker. The dollar index is 60 higher. Energies are
weaker with crude up $1.15. Livestock trade is mixed. Precious metals are flat
to lower with gold flat.


Corn trade is fractionally higher at midday after seeing light selling
overnight and this morning with position squaring ahead of the December report
tomorrow. Ethanol margins remain poor with Christmas travel likely to add some
short-term consumption. Corn basis should likely fade with a firmer board the
past week with more open weather likely to help shipping. The weekly export
inspections were a little softer at 876,052 metric tons. The December WASDE
report will be out on Tuesday, but little change is expected from November with
the January final numbers the longer-term focus. The average 2018-19 domestic
carryover guess is 1.744 billion bushels versus 1.736 on the November report,
and the world number is at 308.4 million metric ton versus the surprise 307.5
November number due to the big increase in China's carryover number. The USDA
also announced 1.625 million metric tons with 1.1 million old crops, and the
balance new crop. On the March chart the 20,50, and 100-day moving averages at
$3.77-$3.79 is our chart support area with resistance at the upper Bollinger
Band at $3.88.


Soybean trade is 2 to 3 cents lower at midday with trade remaining
rangebound. Meal is fractionally lower, and oil is 10 points higher. South
America continues to make good progress with early harvest approaching fast.
Basis will provide signals on the quantity of nearby cash business getting done
with flat to slightly firmer trade so far this week with the extent of nearby
Chinese business still very foggy with more promises of confirmation of details
this week, but we did see 125,000 metric tons sold to unknown on the new crop.
The WASDE report is expected to have the domestic 2018-19 carryover at 938
million bushels versus 955 on the November report and the world carryover at
113.2 versus 112.1 last month. The weekly export inspections were about steady
at 922,064 metric tons. January support is at the 10-day at $9.01. Resistance
is the 200-day at $9.39.


Wheat trade is 2 to 5 cents lower at midday with trade fading off the top
end of the range with spillover pressure from beans. Russian exports have
showed signs of slowing down in recent days, with more signs of US business.
The sharply stronger dollar is a headwind today. The report today will
reconfirm large world numbers but should show a smaller harvest in Australia
given last weeks comments. The weekly export inspections were within
expectations at 480,614 metric tons. The average trade guess for the WASDE
tomorrow is for the 2018-19 domestic carryover to be at 969 million bushels
versus 949 million a month ago. The world number is expected to be at 267.3
versus 266.7 million metric ton last month. On the March Kansas City chart
support is at the 20-day at $4.99 that we cleared on Friday with the 50-day at
$5.20 the next round up.

David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala


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