DTN Midday Grain Comments 01/11 11:23

DTN Midday Grain Comments 01/11 11:23 All Grains Lower at Midday A firm dollar and negative USDA supply side expectations have futures under pressure at midday. By David Fiala DTN Contributing Analyst General Comments The U.S. stock market indices are higher with the Dow futures up 50. The interest rate products are higher. The dollar index is 20 points higher and we have been up 90. Energies are higher with crude up $2. Livestock trade is mixed. Precious metals are narrowly mixed. CORN Corn trade is a nickel lower at midday which takes the futures down near the midpoint of our trading range over the past month heading into the USDA numbers tomorrow morning. Ethanol is dragging down corn dropping to a 6-week low. The weekly EIA numbers had ethanol production up .58% and stocks up 7.14% with only a .6% increase in gasoline usage. Ethanol is now a dime under unleaded futures which may start to encourage more usage and blending. Position squaring should be the theme this afternoon through tomorrow morning ahead of the USDA numbers. The USDA World Agricultural Supply and Demand Estimates ("WASDE") will be out along with the update/final 2016 production data, winter wheat acreage report and December 1 Quarterly Grain Stocks report. The domestic carryover is expected to come in at 2.396 billion bushels versus 2.403 billion on the December report; 2.2-2.8 billion is the range of estimates. The average trade guess for the updated world 2016-17 corn carryover is at 221.9 million metric ton versus 222.3 on the December report. The range of estimates is 218-225 mmt. The 2016 production estimate is expected to be at 15.198 billion versus 15.226 on the November report which is behind the lower domestic carryover number. The December 1 Quarterly stocks are expected to come in at 12.358 billion which is up from 11.238 billion a year ago; the range of estimates is 11.7-12.5 billion. Big supply numbers continue to reign; which has market longs concerned here at midday. On the March corn chart we slipped below the $3.55 20-day moving average which is now resistance, then the $3.62 3/4 January high. The 100-day $3.51 is support then the 1-month low at $3.45 1/2. SOYBEANS Soybean trade is down a dime at midday, meal is off $4.50 a ton and bean oil is up 18 points due to spillover support from crude. Outside markets have helped pressure the soy complex, but due to the dollar pullback, the pressure has eased at midday. Soybean futures are within 3 to 5 cents of the daily low, but we have kept March above $10. The USDA numbers tomorrow are expected to show the world carryover at 82.5 million metric tons versus 82.9 on the December report, the range of estimates is 79.6 to 84.8 mmt. So very little net-change. The US production estimate is expected to come in at 4.38 billion versus 4.361 billion on the November report. The domestic 2016-17 carryover is expected to still slip down though, down to 468 million bushels versus the 480 million on the December report. So the good demand is expected to provide higher usage numbers. The Dec 1 quarterly soybean stocks are expected to be at 2.951 billion versus 2.715 billion a year ago. On the March chart support is at $10, then the $9.97 100-day with resistance at the $10.17 20-day. WHEAT Wheat trade is down 12 cents on Kansas City and Chicago at midday, Minneapolis is down 3 cents. The chart picture turned back lower with Kansas City March breaking below $4.30, the 100-day moving average. This picked up some sell stops and market bulls have not been able to gain any traction to recover the losses. There has been limited supportive fundamental news behind this rally, but the report tomorrow likely has the trade scared due to big supply reminder. The USDA monthly report is expected to show the world carryover at 251.9 million metric ton versus 252.1 on the last report. The domestic carryover is expected to be at 1.148 billion versus 1.143 billion last month. The Dec 1 Quarterly Stocks are expected to be at 2.044 billion versus 1.746 billion a year ago. The All winter wheat seedings estimate is expected to be at 34.2 million acres down from 36.1 a year ago; the range of estimates is 31.7-36.4. Acreage is slipping but the carryovers are so large the market is not concerned. On the Kansas City March chart support is now at the $4.25 10-day then the $4.19 20-day, resistance is at the $4.30 100-day then the $4.39 two-month high printed on Monday. 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 Fiala on Twitter @davidfiala (BAS) Copyright 2017 DTN/The Progressive Farmer. All rights reserved.