DTN Grain Midday: Trending Lower Ahead of Reports

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Flat to weaker trade ahead of the report.

CORN

Corn trade is 1 to 2 cents lower with trade testing the low end of the range ahead of the report with limited fresh news besides some signs of life on the daily export wire with 217,040 metric tons sold to unknown. Harvest should make better progress this week with cold but open weather. Keeping the dryers going in the north rapidly becoming an issue with propane bottlenecks. Ethanol margins remain stable, with both corn and ethanol futures fading this week, helping to support blenders with unlead still near the recent highs.

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 WASDE report trade is looking for yields to come down about a bushel to 167.5 BPA and total production at 13.643 billion bushels, and carryout at 1.817 billion bushels.

On the December contract, support is the $3.71 lows from October, with resistance the upper Bollinger band at $3.75.

SOYBEANS

Soybeans are 3 to 4 cents lower at midday with light selling so far with trade still looking for more trade details before getting too excited ahead of the report numbers today. Meal is $1.00 to $2.00 lower and oil is 10 to 20 points higher, keeping crush margins stable. The ral has surrendered all of the recent gains again, hurting U.S. competitiveness, but we did see 270,000 metric tons of soybeans booked by an unknown destination.

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 of planting. The WASDE report is expected to show yield at 46.6 BPA, down slightly with production at 3.510 billion, and carryout at 428 million vs. 460 last month.

On the January chart support is the 200-day and lower Bollinger band at $9.25 with the 20-day above the market $9.40.

WHEAT

Wheat trade is flat to 2 cents lower with trade remaining rangebound ahead of the report with limited spillover action so far, and little fresh wheat news. The Chicago/Kansas City December spread is 86 cents with narrower action, and now about 134cents from the recent highs.

The corn/hrw spread has widened back to 50 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 the dollar rebound hurting efforts. The WASDE report is expected to show carryout at 1.035 billion bushels.

The December Kansas City chart support is the 20-day at $4.23 which we remain just above then the lower Bollinger Band at $4.15 below that with the upper Bollinger band at $4.32 as resistance.

General Comments

The U.S. stock market is mixed with the Dow down 89. The dollar index is 20 higher. Interest rate products are weaker. Energies are weaker with crude down $0.70. Livestock trade is weaker. Precious metals are mixed with gold up 2.00.

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