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DTN Midday Grain Comments 12/04 11:06
Corn, Soybeans Higher at Midday
Row crop trade is slightly higher at midday.
By David Fiala
DTN Contributing Analyst
U.S. stock markets are narrowly mixed with Dow futures down 2. Interest rate
products are higher. The dollar index is 21 higher. Energies are higher with
crude up $.70. Livestock trade is mixed. Precious metals are flat with gold up
Corn futures are 2 to 5 higher in firmer trade at midday. Corn has been able
build on Tuesday's strength a bit. Outside markets are neutral to a little
friendly this morning. Trade has been able to bounce off Monday's lows, and is
above the 20-day moving average at $4.31. A close above this area could set up
for a little bigger short-covering push in the short term. The trend remains
down for now overall though. Basis has stabilized in the near term. Ethanol
margins remain very strong, but production eased 1.5% last week, with stocks
rising slightly .7%. Export markets remain on edge because of China's early
week comments, but Mexico secured 165,750 metric tons of corn.
Soybean futures are 1 to 4 higher in firmer trade at midday, settling into
the middle of the daily range. Meal is $.50 to $1.50 higher, and oil is
narrowly mixed. January soybean chart support is at $13.16, the 10-day, then
$12.93, the 50-day. Chart resistance is at the recent high up at $13.46, which
we have struggled to challenge since Monday. The chart action suggests
continued volatility in the near term. South American weather continues to look
pretty decent in the near term. Basis for beans is holding together for right
now but could see some pressure as the export business slows and more farmer
movement occurs with firming cash prices.
Wheat futures are 2 to 6 lower across the three exchanges at midday with a
bigger-than-expected wheat production number from StatsCanada this morning.
Support is noted from the bounce in corn and cold air concerns, while the
dollar stays sideways. Key March Chicago chart resistance is at $6.78-$6.80,
where we find the 50-day and 100-day moving averages, and we are about a dime
below these areas for now. Support is at the $6.59-6.60 area where we find the
20-day and 10-day moving averages. A break below this area would likely trigger
additional selling, and a close above the resistance areas would trigger
short-covering. Cold air will raise some concerns, but weather concerns remain
limited for now. Unrest in the Ukraine bears watching as they are a major grain
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Trading Adviser
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