DTN Midday Grain Comments 10/20 11:24
Soybeans Up Double Digits Midday Wednesday
Corn trade is firm at midday Wednesday, beans are 15 cents higher and wheat
is 6 to 15 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 150 points. The U.S. Dollar
Index is 0.09 lower. Interest rate products are mixed. Energies are mixed.
Livestock trade is mixed. Precious metals are higher with gold up $14.
Corn trade was mixed overnight and is steadily firmer Wednesday morning with
trade up a nickel at midday. Harvest is moving along with yield reports staying
fairly steady, providing the market with limited fresh fundamental news. The
chart momentum since a week ago has been in bounce-mode, with a sell-the-rumor,
buy-the-fact mindset surrounding the action around the WASDE report, which was
bearish versus expectations. So, the chart momentum and outside market support
appear to be behind the slow but firmer midday action. On the December
contract, we have chart support at the 200-day moving average at $5.20 with the
$5.06 3/4 low last Wednesday now a major support area. Chart resistance is
right around the $5.35 area, which is the daily high and the 50-day moving
average, with larger upside resistance at the upper Bollinger Band at $5.46.
Soybean trade is 15 cents higher at midday with the upward momentum seeming
to have slowed at this juncture in the day. Meal is up $4 and soybean oil is up
2.00 cents. The strong bean oil trade is supporting beans along with chart
buying. The market is flirting above the 20-day moving average at $12.44 on the
November contract. If we can hold our midday gains into Wednesday afternoon,
some short covering and fresh chart buying could show up. The daily high is 64
cents higher than the low we printed a week ago, so this is a significant
bounce with upside momentum there on the chart. Without some fresh bearish
fundamental news, the market appears to have chart buyers in control. On the
November soybean chart, support is at the $12.22 10-day moving average and then
the recent low of $11.84 3/4 with resistance at the 20-day currently at $12.44
then the 50-day at $12.81.
Wheat trade is 6 to 15 cents higher at midday with upward momentum lead by
Minneapolis, and there is spillover support from corn and beans. The drought in
the spring wheat areas during and before the growing season remains a
significant story echoed by our Minneapolis contract strength. With the move to
new highs Wednesday, we are over $1 above the September low and a good chance
we will see a $10 in front of the nearby contract before the day is over. KC
December chart support is at the 20-day at $7.35 with resistance at the 10/4
high of $7.64. At midday Wednesday, we are at a new high for the current move,
therefore, if we can hold the gains, some short covering or fresh chart buying
could show up near the close.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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