DTN Grain Close: Commodities Drag as Crude Oil Spirals Lower

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Other than livestock and a few exceptions, most commodities — including grains — traded lower Tuesday, influenced by another big drop in crude oil prices. Even Chicago wheat gave back all but 5 3/4 cents of Monday’s big gain.

 

Midday: Soybeans are flat at midday, with corn and wheat weaker.

CORN

Corn trade is 3 to 4 cents lower at midday with trade fading back into support levels, although it has firmed a bit off the early lows.

Ethanol margins will remain poor, which should continue to work weekly production runs lower deeper into winter with ethanol futures remaining at the bottom of the range breaking below $1.25, and blender margins narrowing from the continued losses in the energy complex.

The weekly export inspections were good at 1.136 million metric tons. The weekly crop progress report should show harvest entering the final stretch. Basis will likely remain fairly sideways in the near term.

On the December chart support is at the 10-, 20-, and 100-day moving averages in the $3.67-3.70 area which we are testing at midday with resistance the recent $3.79 high.

SOYBEANS

Soybean trade is narrowly mixed at midday with trade unable to sustain moves in either direction even with fresh announced export sales today. Meal is flat to $1 lower and oil is flat to 10 points lower.

Crush margins remain strong, which is probably the biggest supportive factor as the export program remains slow even with 276,732 metric tons sold to unknown and South America is off to a good start. The weekly export inspections were in line with expectations at 1.301 million metric tons. The weekly crop progress should show harvest effectively complete.

Basis should remain mostly steady as harvest pressure backs off. Support is found at the $8.75 area where we find the 10-, 20-, and 100-day moving averages. Resistance is up at $9 then the $9.06 three-month high.

WHEAT

Wheat trade is 3 to 11 cents lower at midday with trade giving back the gains seen to start the week as once again we find ourselves near the lows. Kansas City trade has firmed against the Chicago trade a bit.

Wheat remains near oversold on the oscillators which should help provide support. The dollar remains near the high end of the range but has rolled over this a.m.

Weekly export inspections were in line with recent weeks at 342,157 metric tons. The weekly crop progress report will be expected to show good to excellent around 50%, with planting and emergence still lagging.

On the December Kansas City chart, we have support at the lower Bollinger Band at $4.82, and resistance the 10-day at $4.97.

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