DTN Midday Grain Comments     09/09 11:48

   Grains Mixed at Midday

   Wheat is firm and corn is near our 2010 highs at midday.

By David Fiala
DTN Contributing Analyst

MARKET SUMMARY:  

   U.S. stock market indices are higher with the DOW futures up 75. Interest 
rate products are lower. The dollar index is steady. Energies are higher with 
crude up $.30. Cattle are flat to lower and hogs are higher. Precious metals 
are lower with gold off $10.  

GENERAL COMMENTS

CORN 

   Corn futures are 2 to 4 higher at midday in slow trade. Trade has been mixed 
due to position-squaring ahead of the September USDA Supply and Demand report 
due out Friday morning. The average trade guess for total 2010 U.S. corn 
production is 13.199 billion bushels vs. the August estimate of 13.36 billion; 
the range of estimates is 12.88 billion to 13.41 billion. The average yield 
expectation is 163.1 bushels per acre vs. 165 bpa last month; the range of 
estimates is 160 bpa to 165.9 bpa. We could see one profit-taking break before 
the day is over, but for now we are pricing in a friendly report with trade now 
2 cents away from our recent highs. The new-crop carryover is expected to come 
in at 1.125 billion vs. 1.31 billion a month ago and old-crop carryover is 
expected to be at 1.412 billion vs. 1.42 billion last month. The outside market 
influence is slightly friendly with crude up 25 cents, the stocks higher and 
the dollar a few points lower. December contract chart support is at $4.50 and 
resistance is up at $4.69 to $4.71. The weekly export sales are delayed until 
Friday due to the holiday. 

SOYBEANS 

   Soybean futures are 2 to 4 lower at midday, meal is $1.50 lower and bean oil 
is up 5 points. Mixed trade appears to be an illustration of position-squaring. 
There was some pressure overnight due to profit-taking by longs but that 
appears to be over. The lower November close Wednesday, back below $10.50, gave 
the appearance of an upside fake out. A move back above $10.50 today may spark 
buying interest. The average trade guess for total production is 3.406 billion 
bushels with a range of 3.354 billion to 3.5 billion bushels; the total crop 
production was estimated at 3.43 billion on the August report. The average 
yield expectation is 43.8 bpa vs. 44 bpa a month ago. The old-crop carryover is 
expected to come in at 151 million bushels vs. 160 million last month. The 
average trade guess for new crop carryover is 304 million vs. 360 million last 
month; the range of expectations is 129 million to 373 million. 

WHEAT 

   Wheat futures are firm at midday with trade now around 20 higher across the 
three exchanges. So wheat has now quickly gained back the losses seen 
Wednesday. It appears we will go into the report on a positive note. The 
average trade guess for new-crop carryover is 914 million bushels vs. 952 
million last month. The range of expectations is 830 million to 995 million. 
World supply side numbers are expected to slip. We are approaching chart 
resistance for the day with trade near Wednesday's highs. So although the 
upward momentum is in place at midday, don't look for a further upside 
extension with traders waiting to see the USDA numbers tomorrow.   

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered Commodity Trading Advisor. 


(AG)

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