DTN Grain Midday: Trade Flat to Lower

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Flat to lower trade at midday, with Chicago wheat the upside leader.

CORN

Corn trade is flat to 2 cents lower at midday with the choppy trade at the lower end of the range continuing. Harvest should make better progress this week with cold but open weather. Keeping the dryers going in the north is rapidly becoming an issue with propane bottlenecks. The weekly ethanol report showed production up 10,000 barrels per day to 1.014 million, and stocks were up 775,000 barrels with futures edging back lower post report.

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. On the December contract, support is the recent low at $3.80 3/4, then the lower Bollinger Band the next level of support at $3.79 with trade nearing oversold conditions. Chart resistance is at the 20-day at $3.87 which we pulled back from, then the $4.01 area where we find the 200-day moving average and near the 2 1/2 month high.

SOYBEANS

Soybeans is 3 to 4 cents lower at midday with trade delays and better South American weather limit gains. Meal is $0.50 to $1.50 lower and oil 5 to 15 points higher. Crush margins remain solidly positive with overall product trade choppy. 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 moving past the halfway point. Trade agreement signing looks to be pushed to December now. On the January chart, support is the 200-day and lower Bollinger Band at $9.27 with the 20-day above the market $9.41.

WHEAT

Wheat trade is 1 cent lower to 2 cents higher with trade still looking to build off support levels with winter wheat seeing the most support and early gains fading at midday. The Chicago/Kansas City December spread is 90 cents with wider action, and now about 12 cents from the recent highs. Chicago got within 5 cents of Minneapolis values as well.

The corn/HRW spread has widened back to 48 cents, working wheat out 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, and Egypt buying Black Sea origin yesterday.

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 9. The dollar index is 5 lower. Interest rate products are weaker. Energies are weaker with crude down $0.45. Livestock trade is lower. Precious metals are mixed with gold up $6.50.

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