DTN Early Word Grains

Winter Kill Birds a Chirpin'

6:00 a.m. CME Globex:

Due to the holiday the grain and oilseed complex was closed overnight. Markets will open at 8:30 am (CT).

CME Globex Recap:

Most markets were closed overnight due to the U.S. Christmas holiday. However, energies were posting a quiet loss early Tuesday morning while metals were higher. The U.S. dollar index was showing a small gain as DJIA futures drifted lower.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 28.23 points (0.1%) lower at 24,754.06, the Nasdaq composite lost 5.40 points to 6,959.96, and the S&P 500 dipped 1.23 points to 2,683.34 Friday. DJIA futures were 25 points lower early Tuesday morning. Asian markets closed mostly higher with Japan's Nikkei 225 down 46.49 points (0.2%), Hong Kong's Hang Seng closed, and China's Shanghai Composite up 25.66 points (0.8%). European markets were closed for Boxing Day. The euro lost 0.0014 to 1.1861 as the U.S. dollar index gained 0.06 to 93.33. March 30-year T-Bonds were 4/32 lower at 150'28 while February gold added $3.20 to $1,282.00. January bitcoin (CME) was $1,095 higher at $15,230. Crude oil was $0.04 lower at $58.43 while Brent crude slipped $0.09 to $65.16. China's Dalian soybean futures were mostly higher while Malaysian palm oil futures were higher overnight.

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BULL BEAR
1) Corn contracts established uptrends on daily and weekly charts last week, possibly sparking a round of noncommercial short-covering this week. 1)

Corn's long-term bearish fundamentals should keep a lid on buying interest, limiting noncommercial short-covering.

2) Soybean contracts, particularly new-crop November, are in position to establish short-term uptrends on daily charts early this week. 2) Soybeans, both futures and cash, are in the process of establishing bearish long-term signals on monthly charts.
3) New-crop winter wheat contracts established secondary (intermediate-term) uptrends on weekly charts, possibly supported by winter kill concerns. 3) Winter wheat is meant to withstand harsh winter conditions, hence its name.

The weekly Newsom on the Market column can be found on subscription sites only. On DTN Pro it is in News/Town Hall and on MyDTN in News/Columns.

MORE COMMODITY-SPECIFIC COMMENTS

CORN Last week saw March corn establish bullish technical signals on its daily and weekly charts, indicating its minor (short-term) and secondary (intermediate-term) trends had turned up. Given that, it would not be surprising to see light follow-through buying interest when the market opens, post-holiday, at 8:30 (CT) Tuesday morning. Also, last Friday's CFTC Commitment of Traders report (legacy, futures only) showed noncommercial interests increasing their net-long futures position to 92,972 contracts. This was before the rally seen the latter part of last week that could lead to continued short-covering support early this week. Fundamentally, there is little fresh news with weekly export inspections expected to be so-so at best. Traders will continue to keep an eye on South American weather as December becomes January, the equivalent of June becoming July in North America.

SOYBEANS Despite last week's bearish trade in soybeans with the DTN National Soybean Index losing 15 1/2 cents for the week, old-crop March futures finished 17 3/4 cents lower, and new-crop November futures dropped 14 3/4 cents, short-term daily charts are on the verge of turning bullish. New-crop November is the more interesting, having held technical support near $9.71 1/2 late last week before rallying Friday. Meanwhile, daily stochastics for both old-crop March and new-crop November remain in single digits, indicating sharply oversold situations and in position to establish bullish crossovers. If so, it could be an early signal that bullish momentum could start to be seen. Fundamentally, the situation is similar to corn, with weekly export inspections not expected to do much for the market as traders continue to monitor South American weather maps.

WHEAT Though winter wheat contracts closed lower last Friday, new-crop July contracts in both Chicago (SRW) and Kansas City (HRW) were able to post bullish technical signals on weekly charts, turning their respective secondary (intermediate-term) trends up. The Kansas City HRW market could garner most of the attention over the course of an otherwise quiet week this week, given the ongoing dry conditions across the U.S. Southern Plains combined with bitter cold temperatures. It is highly likely this will start the "Winter Kill" birds a chirpin', despite the fact winter wheat is meant to withstand harsh winter conditions. Still, an early concern over its death could provide a fundamental excuse, true or not, for noncommercial traders to show more buying interest and extend new-crop winter wheat's uptrend over the course of the week.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.15 $0.01 -$0.37 Mar $0.006
Soybeans: $8.81 $0.01 -$0.68 Jan $0.006
SRW Wheat: $3.89 -$0.01 -$0.36 Mar $0.014
HRW Wheat: $3.70 -$0.01 -$0.52 Mar $0.014
HRS Wheat: $5.87 -$0.04 -$0.25 Mar $0.015

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

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