DTN Midday Grain Comments 12/09 11:16
Soybeans Lead Grains Higher at Midday
Grain trade is mostly higher at midday led by soybeans.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are higher with the Dow futures up 13. The interest
rate products are lower. The dollar index is 8 lower. Energies are mixed, crude
is flat. Livestock trade is higher. Precious metals are flat to higher with
gold up $5.
Corn trade is 1 to 3 higher in quiet firm trade at midday. Outside markets
are neutral to start the week. Ethanol margins remain very strong nearby which
should keep the ethanol plants running hard in the near term. Export
inspections were a marketing year high at 40.3 million bushels. The USDA
December World Agricultural Supply and Demand Estimates will be out tomorrow
morning The average trade carryover estimate is 1.87 billion versus 1.887 last
month; the range of estimates is 1.737-2.013. General short covering due to a
positive chart move appears to be the biggest story today which is position
squaring ahead of the report. On the March chart resistance is at the 50-day
moving average at $4.43. Chart support is the 20-day moving average at $4.31.
The longer-term low will be support below that at $4.18. We closed above the
20-day for three days, but have seen limited upside follow-though. This may set
up trade for firm trade today, before potential pressure turning trade lower on
report day if the report is neutral or negative versus expectations.
Soybean trade is 11 to 15 higher at midday, meal is $7 to $9 higher, and
bean oil is 10 to 20 points lower. South American weather continues to be
viewed as neutral. The average trade guess for the December USDA soybean
carryover is 154 versus 170 million last month. The range of estimates is
120-170 million. So a steady to slightly higher number would be viewed as
negative, but the market is pricing in a friendly report. Or at least we can
say the shorts are nervous and exiting. This has pushed beans up near our
recent highs. January soybean chart support is at $13.10, the 20-day, then
$12.92, the 50-day. Chart resistance is at the high printed last week at
$13.46; $13.45 has been the daily high up to midday. The weekly export
inspections were good at 60.4 million bushels.
Wheat trade is narrowly mixed across the three exchanges at midday. The
lower dollar trend will continue to improve US competiveness in the export
market, but the bigger Canadian crop and stronger Asian currency trends will
limit gains. The wheat balance sheet is expected to have the carryover come
down a little on Tuesday. The average carryover trade guess is 540 million
bushels versus the 565 million November number. The range is 410-570; my bias
is toward very little change versus last month which can occur on the December
reports. The weekly export inspections were good at 19.8 million bushels.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Trading Adviser
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