DTN Midday Grain Comments 11/25 11:39
Soy Complex Higher at Midday
Soybeans lead trade higher at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are flat to higher with the Dow up 15 points. The
interest rate products are mixed. The dollar index is 35 points higher.
Energies are lower with crude down $0.50. Livestock trade is mostly higher.
Precious metals are lower with gold down $3.
Corn trade is flat to 2 cents higher at midday with commercial buying
overcoming the stronger dollar and weaker crude trade. Volume is expected to
remain poor this week with the Thanksgiving holiday trade and limited possible
material market news. The weekly ethanol production report showed production up
3.38% to a new record level, and stocks were 1.96% higher, with gasoline demand
1.47% lower. On the December chart, first support is the 10-day moving average
at $3.62, and then the recent low at $3.56, with resistance that 20-day moving
average at $3.68. Trade has not challenged the 20-day significantly today, and
it looks like we will stay below that areas going into the break. For the
holiday we will have a normal close today then open Friday morning at the day
session opening time and close at noon. If any trade volume shows up in thin
holiday trade we could always have some excitement, but for today the less than
4 cent trading range through midday forecasts a slow afternoon.
Soybean trade is 5 to 9 cents higher with commercial buying adding more
support during the day session. Meal is flat to $1 higher and oil is 25 to 35
points higher. South American weather brings some rains late this week, and a
wetter extended forecast for some areas but some holes are likely to remain.
Soybeans basis has been fairly quiet in recent days, with no major moves yet.
If Argentina drops export taxes more soybeans could move onto the world market
in the near term but there appears to be some near term political hurdles to
accomplishing this. On the January chart, support is at the $8.45 contract low.
Resistance is the 20-day moving average at $8.65 which we have moved above at
midday. Monday was an outside day with a higher close for beans, plus a key
reversal due to a close at a three-day high. If we can hold the move through
the 20-day moving average it may encourage further chart buying.
Wheat trade is narrowly mixed across the three contracts this morning with
Minneapolis trade leading with commercial selling showing up in the Chicago
trade. The dollar has moved solidly higher this morning as well. Russian
conditions should improve this week heading towards dormancy, with no major
cold threats in the near term. Egypt bought French wheat with their tender this
morning. Winter storms will bring moisture so some wheat country the next few
days. On the December Kansas City chart support is at the new contract low
printed yesterday at $4.49 with resistance at the $4.73 20-day moving average.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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