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DTN Grain Close: Soybeans Pressured by Brazilian Rains

Ernst Undesser
From DTN/Telvent November 13, 2017

DTN Grain Close: Soybeans Pressured by Brazilian Rains

©Debra L Ferguson Stock Photography

After several weeks of trying to trade higher, January soybeans broke to their lowest close in five weeks, pressured by beneficial rains in Brazil. Wheat prices also fell lower, taking back last week’s gain while wheat supplies remain a bearish problem.

 

Midday: Trade is lower at midday in quiet action.

CORN:

Corn trade is 2 cents lower at midday in slow trade; the trading range has been 2 1/2 cents, and we are 1 1/2 from the fresh contract low. Soybeans are pulling corn lower here at midday. Ethanol margins were liking the lower corn trade last week, but ethanol is down Monday along with corn.

In general, the lower cash prices and $10 new-crop 2018 soybean board seems to favor more 2018 soybean acreage is what the trade has talked about post WASDE. The weekly Crop Progress report should show harvest progress past 85%.

The weekly export inspections are expected to be in the 600,000 to 900,000 metric ton range, but technical difficulties have delayed the release. On the December chart support is at the new low at $3.40 3/4 with resistance at the $3.50 50-day moving then the $3.58 six-week high.

SOYBEAN:

Soybean trade is 8 cents to 10 cents lower at midday, which has us at a one-month low and challenging chart support. Meal is narrowly mixed and oil is 25 to 35 points lower. South American weather looks benign near term, which will limit buying enthusiasm. The weekly crop progress is expected to show harvest effectively complete.

The weekly export inspections are expected to be in the 1.75 to 2.25 million metric ton area. The USDA announced 135,000 mt of soymeal sold to the Philippines on the daily wire. Coming into Monday, new-crop 2018 futures were around $10, which is around 75 cents above the contract low, while new-crop 2018 corn is within pennies of its contract low. So there is a risk of downside here.

On the January chart, the 100-day is support at $9.76, which is the lowest major moving average, so expect sizeable sell stops below there. Notable resistance at midday is the $9.80 200-day then the $9.89 20-day.

WHEAT:

Wheat trade is 4 cents to 12 cents lower at midday with trade pulling back from the upper end of the range with broader selling returning after failing to extend gains, although the winter wheats have been able to firm off the dime lower trade early in the session.

Minneapolis wheat has been more active in recent days with protein premiums improving, but they have been the weaker side of the complex overnight after fading on Friday. The weekly Crop Progress report should show planting near complete with emergence running behind normal, with conditions steady to slightly better.

The weekly export inspections are expected to be in the 300,000 to 500,000 mt range. On the December, Kansas City support is at the $4.27 20-day then the $4.13 1/2 low. Resistance is at the $4.36 50-day then the $4.60 three-month high.

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Ernst Undesser
From DTN/Telvent November 13, 2017