DTN Early Word Grains
That Red You See Ain't Warmth
March corn was fractionally lower, March soybeans were 4 cents lower, and March Chicago (SRW) wheat was 1 cent lower.
CME Globex Recap:The grain and oilseed complex was glowing red early Thursday morning, but not because it was warm on another cold morning, but because markets were lower. On the other hand, most other commodity sectors were at least showing some green with softs mostly higher, energies mostly higher, and metals higher. Support, in general, came from a weaker U.S. dollar while DJIA futures continued to rally.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
The Dow Jones Industrial Average closed 28.09 points (0.1%) higher at 24,7774.30, the Nasdaq Composite gained 3.09 points to 6,939.34, and the S&P 500 added 2.12 points to 2,682.62 Wednesday. DJIA futures were 40 points higher early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei 225 down 127.23 points (0.6%), Hong Kong's Hang Seng gaining 266.05 points (0.9%), and China's Shanghai Composite up 20.60 points (0.6%). European markets were trading mostly lower with London's FTSE 100 down 3.76 points, Germany's DAX off 25.69 points (0.2%), and France's CAC 40 losing 6.04 points (0.1%). The euro gained 0.0041 to 1.1929 as the U.S. dollar index fell another 0.26 to 92.74. March 30-year T-Bonds were 12/32 lower at 152'18 while February gold gained $3.50 to $1,294.90. January bitcoin (CME) was $1,120 lower at $13,570. Crude oil was $0.10 higher at $59.74 while Brent crude added $0.06 to $66.50. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.
| BULL | BEAR | ||
| 1) | Corn contracts were able to erase some of the overnight loss through early Thursday morning. | 1) | If soybeans remain under pressure Thursday, corn isn't likely to stage a dramatic rally. |
| 2) | Despite selling the last couple days, soybeans remain in a short-term uptrend on daily charts. | 2) | Talk of China having issues with recent shipments of U.S. soybeans continues to be heard in and out of the marketplace. |
| 3) | Frigid temperatures across U.S. winter wheat growing areas could continue to provide support to new-crop July Chicago and Kansas City contracts. | 3) | It is still far too early to be talking about potential winter kill of the U.S. winter wheat crop. |
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 COMMENTSCORN The minor (short-term) uptrend on corn's daily charts got off to a slow start overnight as contracts lost nearly 2 cents during the session. However, as the hours slowly ticked by, the corn market was able to trim losses to fractions by early Thursday morning. Technically, the nearby March continues to find resistance near $3.53 1/2, a price that marks the 50% retracement level of the previous short-term sell-off from $3.60 1/2 through the low of $3.46 1/2. Fundamentally, there isn't much to get the market excited, though traders will continue to watch South American weather maps as the change of the calendar (soon) to January is the equivalent of turning the page to July in the Northern Hemisphere.
SOYBEANS To put a positive spin on the sell-off in soybeans, the March contract's minor (short-term) trend remains up (for more information, see DTN's Technically Speaking blog updated later Thursday morning). Also, the contract is holding short-term technical support at $9.61 1/2. A look at its daily chart shows the contract needs to hold this level despite the fact commercial selling could intensify as Thursday rolls along. Fundamentally, there is little fresh news regarding the weather in South America, though the Brazilian crop seems to be doing fine and Argentina's weather pattern appears to be non-threatening. On the demand side, there continues to be talk of China having issues with the quality of recent U.S. soybean shipments. While this could be no more than the usual gamesmanship being played, it makes action in basis and spreads that much more important as we head deeper into winter.
WHEAT Winter wheat markets were quietly struggling early Thursday morning, though new-crop July contracts for both Chicago (SRW) and Kansas City (HRW) continue to show secondary (intermediate-term) uptrends on weekly charts. From a fundamental point of view, this is likely due to ongoing dry conditions across the U.S. Southern Plains (HRW) and bitter cold over both the Midwest (SRW) and Southern Plains growing areas. While it is too early to talk winter kill of the crop in the ground, it will be something to watch when (or if) the spring thaw sets in. The carry in the Kansas City July-to-September 2018 futures spread remains at a bearish level, but has been in an uptrend (weakening carry) since last August.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.17 | $0.02 | -$0.37 | Mar | $0.008 |
| Soybeans: | $8.89 | -$0.02 | -$0.79 | Mar | $0.008 |
| SRW Wheat: | $3.93 | $0.06 | -$0.35 | Mar | $0.005 |
| HRW Wheat: | $3.74 | $0.06 | -$0.52 | Mar | $0.003 |
Darin Newsom can be reached at darin.newsom@dtn.com
Darin can be followed throughout the day at www.twitter.com\DarinNewsom
(BAS)
Copyright 2017 DTN/The Progressive Farmer. All rights reserved.