DTN Midday Grain Comments 12/10 10:54
Grains Mixed at Midday
Grain trade is mixed ahead of the report.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are lower with the Dow futures down 35. The interest
rate products are lower. The dollar index is 14 lower. Energies are mixed,
crude is up 0.60. Livestock trade is lower. Precious metals are higher with
gold up $28.
Corn is narrowly mixed in quiet trade before today's USDA report, due out at
11 a.m. Outside markets are generally neutral this morning. The average trade
estimate for the December carryover is 1.87 billion bushels versus 1.887 bb
last month; the range of estimates is 1.737-2.013. 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. Trade has found some generally short covering
the last few days helping the limited rally. Exports and ethanol use remain
supportive as positive margins attract users. Our bias at this time is toward
light volatility around the report, then a lower market bias the rest of the
Soybean trade is 3 to 9 higher ahead of the report, with meal $1 to $2
higher, and oil flat. South American weather continues to be viewed as neutral,
with corn-planting delays potentially attracting additional soybean acres. The
average trade guess for the December USDA soybean carryover is 154 million
bushels versus 170 mb last month. The range of estimates is 120-170 million
bushels . A steady to slightly higher number would be viewed as negative
today, but the market is pricing in a friendly report with the light rally this
past week. January soybean chart support is at $13.10, the 20-day, then $12.92,
the 50-day. Trade put in a new high this morning at $13.53. Trade should be
active today; we expect buy stops above $13.50 on a post report move.
Wheat trade is 2 to 8 lower across the three exchanges at midday, pressing
into contract lows once again. The average carryover trade guess is at 540
million bushels versus the 565 mb November number. The range is 410-570; our
bias is toward very little change versus last month which can occur on the
December reports. Last month the trade was also looking for a drop in the
carryover. The cold should break in the next few days, limit concerns in the
U.S., while the rest of the world sees limited issues for the time being. The
larger Canadian production will continue to hang over the market in the near
term as well.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Trading Adviser
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