DTN Grain Midday: Trade Trending Higher

©Debra L Ferguson Stock Images

Wheat leads at midday with trade fading from early highs.

Corn

Corn trade is narrowly mixed at midday with trade struggling to extend gains ahead of the report with overbought conditions. Drying will be needed to build harvest pace across the south to middle of the Belt, with the north likely facing a tough situation at the end of the week.

The weekly ethanol report was friendly with production edging 5,000 barrels per day higher to 963,000 with stocks down 1.995 million barrels, pushing futures a nickel higher. Basis remains flat to weaker with anticipation of more inbound bushels soon. South American corn planting is underway, with second-crop shipments out of Brazil remaining active.

The WASDE report is expected to show yields down to 167.5 BPA from last month, with carryout at 1.808 billion bushels, down sharply from last month at 2.2 billion. On the December contract support is at the 10-day at $3.86, and resistance the upper Bollinger Band at 3.98 which we are just below.

SOYBEANS

Soybeans is 4 to 6 cents higher with reports that China is willing to up its purchase commitments from 20 to 30 million metric tons as part of a interim trade deal. Meal is 3.00 to 4.00 higher and oil is 5 to 15 points lower. Crush margins remain good.

Economically U.S. export competitiveness remains improved, but remains at a steep currency disadvantage to South America. Bean basis remains flat in the interior until harvest expands more. South America has the beginnings of planting but remains behind the normal pace so far.

The WASDE report is expected to show yields down slightly to 47.2 BPA, with carryout at 489 million bushels down from 640 million. On the November chart support is the 200-day at $9.10 with the upper Bollinger band remaining resistance at $9.29, the upper Bollinger Band, which we are tested this a.m.

WHEAT

Wheat trade is 1 to 5 cents higher with Kansas City leading action this a.m. with overall rangebound trade ongoing. The Chicago/Kansas City December spread is 86 cents with steady to slightly wider action to start the week. Remaining spring wheat harvest will likely be stopped with the incoming cold front.

The corn/HRW spread has widened back to 20 cents from 13 cents at the low this week. Export action continues to be dominated by Black Sea origin.

The WASDE report is expected to show wheat carryout at 960 million bushels off from 1.14 billion last month. The December KC chart support is the $4.07-4.09 area where the 10-, 20-, and 50-day moving averages are clustered with the upper Bollinger Band at 4.14 resistance, which we are testing.

General Comments

The U.S. stock market is firmer with the Dow 140 higher. The dollar index is 7 lower. Interest rate products are firmer. Energies are firmer with crude up 1.00. Livestock trade is firmer with feeder cattle leading. Precious metals are mixed with gold up $8.00.

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