DTN Midday Grain Comments 10/09 11:00
Wheat, Beans Higher at Midday
Grain trade is mixed in quiet action ahead of the report.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are higher with the DOW futures up 25 points. The
interest rate products are mostly higher. The dollar index is 45 points lower.
Energies are mixed with crude up .30. Livestock trade has cattle lower, and
hogs higher. Precious metals are higher with gold up $12.
Corn trade is flat to a penny lower ahead of the monthly USDA report; the
range overnight up to midday has been around 2 lower to 3 higher. Ethanol
margins should be supported by energies breaking out higher this week out of
the recent range. The monthly WASDE report should give us direction the rest of
the day. The average trade guess is for a 13.505 billion bushel crop versus
13.585 billion on the September report, the range of estimates is 13.28 to
13.799. The carryover is expected to slip to the 1.535-billion-bushel area
versus the 1.592 September number. On the nearby December chart nearby support
is the 10-day moving average at $3.91, then the 20-day at $3.87. Resistance is
at the 200-day at $3.98.
Soybean trade is 5 to 7 cents higher lower at midday with selling pressure
showing after positive overnight trade. Meal is flat to $1 lower and oil is 15
to 25 points lower. Harvest progress should continue rapidly with warm
temperatures and fairly open weather with isolated rains slowing progress. On
the report, the average trade guess is looking for a 47.2 yield versus 47.1 on
the report last month, but lower acreage so the production estimate is at 3.91
billion versus 3.935 on the September report. The carryover estimate is at 415
million bushels versus 450 on the September report. USDA announced 360,000
metric tons of soybeans sold to China. On the November chart the contract low
at $8.53 1/4 is long term support with the 20-day moving average at $8.83
nearby support, which we are below ahead of the report. Upside resistance is at
the $8.99 50-day then the $9.02 high seen last week.
Wheat trade is 1 to 3 cents higher across the three contracts at midday in
quiet trade ahead of the report. The dollar is sharply lower this morning which
is adding support. International weather is a growing question mark with
Australia mostly in focus with heat in the near term, but ample world supplies
will limit concerns. Focus on corn and soybean harvest activity and the low
wheat prices may limit winter wheat plantings this month, and wheat likely
needs to buy additional acres. Egypt bought Black Sea wheat this morning, with
prices paid edging higher. The WASDE report is expected to show some reduction
in wheat carryout after the stocks and production reports were below
expectations. The average carryover estimate is at 820 million bushels versus
875 million on the September report. The weekly export sales were soft at
288,200 metric tons. On the Kansas City December chart support is at the 10-day
at $5.04 and 20-day moving average at $4.97 with resistance at the $5.20
seven-week high reached this week then the $5.33 100-day moving average.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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