DTN Midday Grain Comments 12/05 12:04
Corn, Soybeans Higher at Midday
Double-digit midday gains in beans and corn has market bulls in control.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 70. The
interest rate products are lightly lower. The dollar index is 39 lower.
Energies are mixed with crude up $0.25. Livestock trade is mostly higher.
Precious metals are lower with gold down $9.
Corn trade is a dime higher at midday and near the daily high; we have seen
some surprise strength since the day session open due to chart buying,
spillover support from beans as well as a few other noted factors. The weekly
export inspections were good at 1.15 million tons. Chart momentum is up at
midday with futures moving above the $3.54 area where we found the 10-day,
20-day and 50-day moving averages. Trend line resistance is at $3.61, then the
$4.64 upper Bollinger Band, then the $3.69 4-month high. Support is at $3.54.
The move last week was bearish, but now this surprise move this morning could
have short covering a dominant market force this afternoon.
Soybean trade is 17-18 higher at midday, meal is up $8 and bean oil is up 5
points at midday. Momentum remains higher with futures within a nickel of our
daily highs. The weekly export inspections were again extremely large boosting
futures; they were at 1.910 million tons. The South American weather seeing
little change, the market is questioning the strength at midday. The dollar is
lower, crude higher and the stocks higher, so there is some outside market
support. This strength brings beans back to the middle of our two week range.
This also takes the market back above the 10-day and highest major moving
average which may keep fund length coming into the complex. On the January
chart the 10-day at $10.36 is now support with resistance at the $10.65
Wheat trade is mixed at midday with little fresh friendly news for wheat
except spillover support from the row crops. Sure the dollar is lower on the
day, but export news remains slow and the dollar remains at a high level. The
weekly wheat export inspections were 453,633 tons which was a neutral number
versus expectations. Moisture over the weekend was welcome for winter wheat
areas. On the Kansas City March chart support is at the $0.01 contract low
printed last Thursday, resistance is at the $4.21 10-day moving average and
lowest major moving average.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow Fiala on Twitter @davidfiala
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