DTN Grain Midday: Soybeans Off Due To Trade, South American Concerns

Photo: University of Arkansas

Corn is 2 cents higher, soybeans are 10 to 12 cents lower, and wheat is 6 to 9 cents higher. Outside markets are positive. U.S. stock market indices are firmer with the Dow 435 higher. The U.S. dollar index is 9 points lower. Interest rate products are higher. Energies are firmer with crude up $1.15. Livestock trade is mixed. Precious metals are mixed with gold $32.00 lower.

CORN

Corn futures are 2 cents higher at midday with light buying, oversold conditions and little fresh news. Ethanol margins remain under pressure, which will likely continue until improvement is seen on blend rates and refinery waivers.

The weekly report showed production down 25,000 barrels Thursday, with stocks 819,000 higher on disappointing gasoline demand. Futures are flat with support from the rest of the energy complex.

Corn basis remains mixed to weaker overall, with harvest getting closer but still too far away in some areas with board prices low. The weather forecast does not indicate any near-term threats.

Export sales are delayed until Friday due to the holiday. On the December, nearby chart support is likely the $3.56 1/2 low with the lower Bollinger Band at $3.43 below that and resistance the 10-day average at $3.66, with the 20-day next at $3.75.

SOYBEANS

Soybean futures are 10 to 13 cents lower, with demand concerns flaring again about growing expectations of South American production and no material trade progress yet.

Meal is $2.00 to $3.00 lower and oil is 25 to 35 points lower. Crush margins remain positive overall, with oil staying towards the upper end of the range, and meal finding support at $290 again Thursday before firming again.

Basis remains flat overall.

The Brazilian real has found support this morning versus the dollar but remains near record lows, with Argentina expected to favor bean production because of political considerations.

The weather looks to be a short-term non-issue for soybeans with maturity the biggest concern. November chart support is the 10-day average at $8.65, with the 20-day just below the market at $8.72 becoming support with the strong finish but we have faded below them at midday. The upper Bollinger band at 8.89.

WHEAT

Wheat futures are 6 to 9 cents higher at midday, with light buying as the dollar holds it reversal and profit-taking versus oversold conditions. The KC/Chicago spread is at 74cents with KC gaining slightly at midday.

The corn/HRW spread is wider, back to 33 cents. KC wheat is now back to competitive on the world market, trading also into feed rations. Spring wheat harvest is trying to play catch-up with the slow start in the Northern Hemisphere with difficulties lingering in many places.

The December KC chart support is the new low at $3.80 with the first resistance the 10-day average at $3.97 and then the 20-day at $4.06.

  • David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered adviser. He can be reached at dfiala@futuresone.com
  • Follow him on Twitter @davidfiala

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