DTN Midday Grain Comments 12/06 11:06

DTN Midday Grain Comments     12/06 11:06

   Grains Mixed at Midday

   Soybeans lead at midday with trade giving back early gains. 

By David Fiala
DTN Contributing Analyst

 General Comments



   The U.S. stock market is firmer with the Dow up 320 higher. The dollar index 
is 40 higher. Interest rate products are firmer. Energies are lightly firmer 
with crude $0.60 higher. Livestock trade is mostly higher. Precious metals are 
mostly lower with gold down 18.80.


   Corn trade is 1 to 2 cents lower at midday with trade turning lower during 
the day session as early buying evaporates again. Ethanol margins have remained 
steady with the blenders gaining the benefit of the crude and unleaded move 
this week while ethanol futures remain sideways. Basis has held up well with 
some strength showing up at processors again. The USDA reported 245,872 metric 
tons of corn sold to Mexico. On the March contract support is the lower 
Bollinger band at $3.74 which we have held just above, with resistance the 
20-day at $3.80. 


   Soybeans are 3 to 4 cents higher at midday with support from short covering 
and reports that China was going to allow further tariff-free imports of 
soybeans but early gains failed to hold again. Meal is $2.00 to $3.00 lower and 
oil is 60 to 70 points higher with meal moving back below $300 a ton. The real 
remains cheap vs. the dollar with Brazilian weather still in good shape, with 
Argentina more mixed. Bean basis has moved to a more sideways trend short term 
with pockets of firmness showing up on the break. January chart support is the 
lower Bollinger Band at $8.63 which we are finally pulling away from, with 
resistance well above the market at $8.98 where the 20-day moving average, 
along with exceptionally oversold conditions starting to ease.


   Wheat trade is flat to 4 cents lower with Minneapolis trade leading at 
midday with trade boring back into support levels. The Chicago/KC March spread 
is back to 85 cents. Chicago also holding a 6 cent premium to Minneapolis which 
has narrowed sharply this week. The dollar rebounded today, adding pressure as 
well. Export business has been quiet so far this week. The forecast dries the 
Plains back out short term, with little change to world conditions north and 
south this week. The March KC chart support is the lower Bollinger Band at 
$4.23, and resistance the 20-day at 4.35.

   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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