DTN Grain Midday: Markets Turn Lower

©Debra L Ferguson Stock Images

Wheat is flat to higher, row crops weaker at midday.

CORN

Corn trade is 1 to 2 cents lower at midday with trade testing the lower end of the range again with harvest pressure and spillover from the soybeans. Harvest should make better progress this week with cold but open weather. Ethanol margins remain stable with blender and producer margins both seeing small gains to start the week and flat futures trade.

Basis should see more pressure as harvest progresses as we move to the back half nationally. South America should see areas of improvement as planting progresses. Weekly crop progress showed conditions unchanged at 58% good to excellent, and 13% poor to very poor, with 52% harvested vs. 75% on average, and 96% mature vs. 100% on average.

On the December contract support is the recent low at $3.82, then the lower Bollinger Band the next level of support at $3.80 with trade nearing oversold conditions. Chart resistance is at the 20-day at $3.88 from which we pulled back, then the $4.01 area where we find the 200-day moving average and near the 2 1/2 month high.

SOYBEANS

Soybeans is 4 to 6 cents lower at midday with rangebound action continuing with a test of the lower end of the range again today. Meal is flat to 1.00 higher and oil is 20 to 30 points lower. Crush margins remain solidly positive but the oil rally is fading, along with oversold conditions but they are starting to ease. The real remains elevated but is a little softer again today.

Bean basis should see pressure start to fade. South America should make more progress through the week with improved weather, and Brazil about half planted. Weekly crop progress showed harvest 75% vs. 87% on average. On the January chart, support is the 200-day and lower Bollinger Band at $9.28 with the 20-day above the market $9.41.

WHEAT

Wheat trade is 1 to 2 cents higher with trade still looking to build off support levels with improved export competitiveness starting to develop although Russia dominated the Egyptian export tender again today. The Chicago/Kansas City December spread is 87 cents with narrower action, and now about 12 cents from the recent highs.

The corn/HRW spread has widened back to 38 cents, with wheat working back to the edge of rations. Russian values remain elevated with Australia dry, but the U.S. is still struggling to capture a larger share, with HRW movement the brightest spot so far.

Weekly crop progress showed planting at 89% vs. 88% on average, 71% emerged vs. 74% on average, with conditions 1 percentage point better at 57% good to excellent, and 13% poor to very poor.

The December Kansas City chart support is the 20-day at $4.22 which we remain just above then the lower Bollinger Band at $4.10 below that with the upper Bollinger Band at $4.34 as resistance.

General Comments

The U.S. stock market is mixed with the Dow up 35. The dollar index is 45 higher. Interest rate products are firmer. Energies are firmer with crude up $0.60. Livestock trade is mixed with hogs leading. Precious metals are mixed with gold down 27.00.

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