DTN Midday Grain Comments     12/12 11:19

   Grains Trending Higher at Midday

   Flat to slightly higher trade is seen with some chart buying being met with 
selling at the recent highs. 

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are firmer with the Dow futures up 340. The 
interest rate products are firmer. The dollar index is 35 lower. Energies are 
firmer with crude up $0.80. Livestock trade is mixed. Precious metals are flat 
to higher with gold up $4. 

   CORN

   Corn trade is flat to 1 cents higher at midday with trade following the lead 
of the soybean market with weaker action as soybeans back off the highs. Corn 
basis looks to be flat in the near term. The weekly ethanol report showed 
production down 23,000 barrels per day, with stocks down 140,000 barrels, with 
ethanol futures a penny higher. The December WASDE report showed little change. 
The domestic carryout was 1.781 billion bushels, up 50 million from last month, 
and the world number was 308.8 million metric tons, up 1.3 from last months big 
jump. Yields were left unchanged at 178.9, along with South American production 
at 94.5 million metric tons for Brazil, and 42.5 mmt for Argentina. On the 
March chart, the 20-, 50-, and 100-day moving averages at $3.77-$3.79 is our 
chart support area with resistance at the new high scored at $3.87 3/4.

   SOYBEANS

   Soybean trade is 3 to 6 cents higher at midday with trade optimism with 
continued talk of major Chinese purchases incoming but we have slipped nearly a 
dime off the highs. Meal is $1.00 to $2.00 higher and oil is flat to 10 points 
lower. South America continues to make good progress with early harvest 
approaching fast with a few dry pockets in Brazil drawing more worry. Basis 
will provide signals on the quantity of nearby cash business getting done with 
flat to slightly firmer trade so far this week. The daily wire had sales of 
130,062 metric tons sold to Mexico, and 110,000 to unknown, with talk of 
500,000 mt purchased by China. The WASDE report left yields and domestic 
carryout unchanged at 52.1 BPA and 955 million bushels, with world carryover at 
115.3 mb this month, up from 112.1 mb last month, with Brazil and Argentina 
production left unchanged at 94.5 million metric tons and 55.5 respectively. 
January support is at the 10-day at $9.08. Resistance is the 200-day at $9.39.

   WHEAT

   Wheat trade is 2 to 6 cents higher at midday with trade rebounding from the 
post-report weakness Tuesday. The dollar strength has relaxed overnight with 
more progress needed to boost U.S. competitiveness. The WASDE report raised 
domestic carryout 25 million bushels to 974 million metric tons, with world 
stocks at 267.8 million metric tons, up from 266.7 mmt last month. Australian 
harvest will continue in the near term. North American winter wheat is seeing 
milder weather. On the March Kansas City chart, support is at the 20-day at 
$4.99 that we cleared on Friday with the 50-day at $5.19 the next round up. 

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered adviser
He can be reached at dfiala@futuresone.com 
Follow him on Twitter @davidfiala


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