DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally higher, March soybeans were 2 cents lower, and March Chicago (SRW) wheat was 2 cents higher.

CME Globex Recap:

The U.S. dollar took a beating overnight as word came out Chinese officials were talking about slowing down or halting purchases of U.S. treasuries. This naturally led to a spike rally gold, metals in general, and supported an extension of long-term uptrends in the energy complex. Grains were mostly higher, with only Minneapolis spring wheat sitting fractionally in the red. However, the Chicago soybean complex was mostly lower.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 102.80 points (0.4%) higher at 25,385.80, the NASDAQ Composite gained 6.19 points (0.1%) to 7,163.58, and the S&P 500 added 3.58 points (0.1%) to 2,751.29 Tuesday. DJIA futures were 98 points lower early Wednesday morning on the uncertainty of the news out of China. Asian markets closed mostly lower with Japan's Nikkei 225 down 61.79 points (0.2%), Hong Kong's Hang Seng up 62.31 points (0.2%), and China's Shanghai Composite adding 7.93 points (0.2%). European markets were trading lower with London's FTSE 100 off 7.42 points (0.1%), Germany's DAX down 105.60 points (0.8%), and France's CAC 40 losing 26.28 points (0.5%). The euro gained 0.0054 to 1.1990 as the U.S. dollar index fell 0.43 to 92.09. March 30-year T-Bonds were 26/32 lower at 149'13 while February gold jumped $10.90 to $1,324.60. Crude oil was $0.52 higher at $63.48 while Brent crude gained $0.36 to $69.18. China's Dalian soybean futures were mostly higher and Malaysian palm oil futures were higher overnight.

	BULL		BEAR
1)	Corn contracts have been able to hold previous lows, maintaining minor (short-term) uptrends on daily charts.	1)	Corn's long-term term trends remain down, and could easily trump the minor uptrend on daily charts and secondary sideways patterns on weekly studies
2)	Continued weakness of the U.S. dollar could spark increased buying interest of U.S. soybeans.	2)	Soybean traders are concerned that the weaker U.S. dollar is due to bearish news out of China.
3)	The secondary (intermediate-term) uptrend in July KC wheat continues to strengthen.	3)	New-crop winter wheat fundamentals remain bearish.

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 One must have a vivid imagination to create an intriguing story in corn these days, but here goes: Old-crop March has staged a rally after testing its contract low of $3.46 1/2 Monday, setting up a potential double-bottom pattern and a move to Wave 3 of a minor (short-term) 5-wave uptrend on its daily chart. Whew! Yes, overnight trade saw March post another 1 1/4-cent trading range on volume (futures only) of 5,000 contracts. And yes, corn contracts were within fractions of Tuesday's close early Wednesday morning. All these are a given anymore, even more so with USDA's round of January reports growing larger on the horizon (set for release Friday, January 12). However it is interesting, from a technical point of view that corn remains in a minor uptrend heading into this particular set of government data. As for secondary (intermediate-term) trends on weekly charts, much depends on Friday's close as to whether the market wants to build an uptrend on the double-bottom pattern or fall to new lows. Keep in mind the market's major (long-term) pattern on monthly charts remains down.

SOYBEANS Soybeans were lower again overnight into Wednesday morning, though contracts had rallied a bit off session lows. For example, old-crop March dipped as much as 5 1/2 cents before sitting only 2 cents lower as of this writing. As with corn, this week's pressure has led to a test of previous contract lows in soybeans, though minor (short-term) uptrends continue to hold together. Of course Friday's USDA numbers could change all that, depending on how algorithm-based computerized fund trading programs react. Fundamentally there is little fresh news Wednesday, with traders continuing to watch weather developments in South America. Also, the U.S. dollar is sharply lower overnight, a factor that would usually be viewed as supportive to U.S. soybeans. This time around, though, the greenback is under pressure due to news out of China leading to uncertainty in soybeans. Delivery of another 21 contracts was reported against the January issue, putting the total at 148 contracts.

WHEAT Winter wheat markets were higher early Wednesday, supported by light buying tied to weather concerns. A look at the previous 7-day precipitation maps shows little to nothing occurring over the bulk of the U.S. Southern Plains HRW growing area, keeping the heat under the new-crop July contract on at least simmer. From a technical point of view, July KC wheat remains in a solid secondary (intermediate-term) uptrend as it closes in on last week's high of $4.70 3/4. The initial upside target remains near $4.83 1/2, then between $5.00 and $5.10. Weather remains the key factor for winter wheat at this time, though commercial traders haven't shown a lot of buying interest. The carry in the KC July-to-September futures spread remains at a strong 15 3/4 cents.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.16	$0.02	-$0.33	Mar	$0.005
Soybeans:	$8.93	-$0.03	-$0.71	Mar	$0.001
SRW Wheat:	$4.01	$0.05	-$0.31	Mar	$0.002
HRW Wheat:	$3.92	$0.07	-$0.47	Mar	$0.011
HRS Wheat:	$6.10	$0.05	-$0.21	Mar	$0.002

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

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

(BAS)

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