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DTN Midday Grain Comments     10/30 11:04

   Grains Flat to Lower at Midday

   Grain trade is weaker at midday with soybeans leading the path lower.

By David Fiala
DTN Contributing Analyst

General Comments

   The U.S. stock market indices are mixed with the Dow up 120.  The interest 
rate products are lower. The dollar index is 16 higher. Energies are lower with 
crude down $1.40. Livestock trade is mostly higher. Precious metals are lower 
with gold down $28.

   CORN

   Corn trade is flat to 2 lower at midday after touching the $3.81 August high 
on the overnight trade. Outside markets are negative with a firmer dollar and 
weaker crude oil. We have made a 30% retracement of the May-October market 
decline with a 40% retracement at $3.98. This range is a typical retracement 
bounce range and of course it surprised many this month. Seasonally you look 
for a low once you are past the 50% level of harvest, but we are only getting 
there this week. Weather remains open for harvest to advance in the near term, 
while South America is generally expected to see improved planting pace, but 
overall acres are the bigger question. Ethanol production should remain 
elevated with margins positive but seeing further pressure from the rising corn 
price and sliding crude. December chart support is the 10-day moving average at 
$3.60. The weekly export sales were disappointing at 489,800 metric tons, and 
the USDA announced a sorghum sale of 113,000 metric tons to unknown.

   SOYBEANS

   Soybean trade is 8 to 13 cents lower after the big gains yesterday with long 
liquidation kicking in this morning. Meal is $8 to $9 lower at midday after 
hitting new highs overnight, with oil flat to 10 points lower. The nearby cash 
market is firm due to the pipeline needing to be filled with new crop supplies. 
Also scheduled shut downs lowered meal and oil supplies this past month or so. 
Short covering has back off this morning robbing the trade of some of the 
upward bias. Expect an active trade the rest of the week with 30-50 cent range 
potential with a 30 range so far today. On the January soybean chart the 
100-day moving average is up at $10.82, the area in between our closes today 
and the 100-day are $1.35-1.60 above the contract lows printed less than a 
month ago. This rally should get more beans out of farmer and reseller hands. 
The weekly export sales estimates were good at 1.33 million metric tons of 
beans, 147,800 of meal, and 15,800 of soyoil. This USDA announced additional 
sales to China of 132,000 metric tons.

   WHEAT

   Wheat trade is mixed at midday with selling pressure spilling over from the 
row crops after early strength. The dollar has firmed after the Federal Reserve 
ended QE3 yesterday, but is off the overnight highs. The Kansas City December 
contract is back above the 50-day and 10-day which could spark chart buying the 
next two days as we end the week and month. The 100-day up at $6.48 is the next 
major moving average. The weekly sales were at the high end of expectations at 
444,900 metric tons. The demand picture needs to improve to support the bull 
argument here. Wheat appears to have found a low in late September but the 
October rally / bounce stalled over a week ago. It just seems like wheat will 
take direction from the row crops near term. 

   David Fiala is a DTN contributing analyst and the president of FuturesOne 
and a registered Trading Adviser. 

   David Fiala can be reached at dfiala@futuresone.com 

   Follow David Fiala on Twitter @davidfiala


(CZ)

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