DTN Midday Grain Comments     10/11 11:18

   All Grains Higher at Midday

   Trade is sharply higher at midday across the board. 

By David Fiala
DTN Contributing Analyst

 General Comments

   

   

   The U.S. stock market is sharply higher with the Dow up 475. The dollar 
index is 460 higher. Interest rate products are firmer. Energies are firmer 
with crude up 1.05. Livestock trade is mixed. Precious metals are mixed with 
gold down $18.00.

   CORN

   Corn trade is 12 to 14 cents higher at midday with support from weather and 
trade after holding support in the post-report selloff yesterday with the 
report losses reversed. Harvest will remain slow with the cold front moving 
through. The ethanol margins have improved this week with broader harvest 
needed to support production levels, with ethanol futures edging higher today. 
Basis remains flat to weaker with anticipation of more inbound bushels soon. 
South American corn planting is underway, with second-crop shipments out of 
Brazil remaining active. The WASDE report raised yields 0.2 BPA to 168.4, vs. 
166.8 expected, with production at 13.779 billion, down slightly from last 
month on reduced harvested acres, and carryout at 1.929 billion down from 2.19 
last month vs. expectation of 1.682 billion. On the December contract support 
is at the 10-day at $3.88, and resistance the upper Bollinger Band at 3.99.

   SOYBEANS

   Soybeans are 11 to 13 cents higher at midday with support from report 
numbers and reported trade progress supporting the market. Meal is 3.50 to 
$4.50 lower and oil is 10 to 20 points higher. Crush margins remain good. 
Economically US export competitiveness remains improved, but remains at a steep 
currency disadvantage to South America with more China buying possible with the 
trade deal. Bean basis is seeing some pressure from expanded harvest through 
midweek but pace will likely slow again. South America has the beginnings of 
planting but remains behind the normal pace so far. The WASDE report was 
supportive with yields down 1 BPA from last month at 46.9 vs expectations of 
47.2, and carryout at 460 million bushels vs. 640 last month, and 497 expected, 
on production of 3.55 billion vs. 3.63 billion last month. On the November 
chart support is the 200-day at $9.10 with the upper Bollinger band remaining 
resistance at $9.36, the upper Bollinger band, which we are testing this 
morning.

   WHEAT

   Wheat trade is 10 to 19 cents higher with Chicago trade leading at midday 
with spillover from the row crops adding support along with aggressive short 
covering. The Chicago/Kansas City December spread is 93 cents with choppy 
action continuing with Kansas City and Chicago taking turns leading. Remaining 
spring wheat harvest will likely be stopped with the incoming cold front. The 
corn/hrw spread has widened back to 24 cents from 13 cents at the low this week 
working wheat back out of rations. Export action continues to be dominated by 
Black Sea origin. The WASDE report showed carryout at 1.043 billion bushels, up 
from 1.014 last month, and vs. 1.01 expected. The December Kansas City chart 
support is the $4.07-4.09 area where the 10,20, and 50-day moving averages are 
clustered with the upper Bollinger Band at 4.16 as resistance which we are 
testing at midday. 

   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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