DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally higher, March soybeans were fractionally lower, and March Chicago (SRW) wheat was 1 cent lower.

CME Globex Recap:

As a winter storm rages outside across much of the U.S. Midwest, the grain and oilseed complex finds itself in the calm before another storm. Overnight trade into Thursday morning saw quiet, mixed markets ahead of Friday's much anticipated round of USDA reports. Winter wheat was a penny lower while corn and soybeans were fractionally mixed. Energies and metals also rallied despite a slight strengthening of the U.S. dollar. DJIA futures were also showing green early Thursday. The big move was cotton as the nearby March contract jumped more than 1.00, moving the market beyond 81.00 for only the second time since June 2014.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 16.67 points lower at 25,369.13, the NASDAQ Composite lost 10.01 points (0.1%) to 7,153.57, and the S&P 500 dropped 3.06 points (0.1%) to 2,748.23 Wednesday. DJIA futures were 20 points higher early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei 225 down 77.77 points (0.3%), Hong Kong's Hang Seng up 46.67 points (0.2%), and China's Shanghai Composite adding 3.51 points (0.1%). European markets were trading mostly lower with London's FTSE 100 up 1.86 points, Germany's DAX down 23.90 points (0.2%), and France's CAC 40 off 0.70 point. The euro lost 0.0003 to 1.1946 as the U.S. dollar index gained 0.07 to 92.43. March 30-year T-Bonds were 2/32 higher at 150'04 while February gold was unchanged at $1,319.30. Crude oil was $0.42 higher at $63.99 while Brent crude gained $0.35 to $69.55. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	March corn continues to hold above its short-term double-bottom low near $3.46 1/2.	1)	March corn continues to hold below its short-term double-top high of $3.54 1/2.
2)	Futures spreads have stabilized of late, indicating at least modest commercial buying interest.	2)	Soybean traders are registering at least light concern over recent saber rattling between the U.S. and China in regards to trade.
3)	The secondary (intermediate-term) uptrend in July KC wheat continues to strengthen.	3)	Commercial buyers are not convinced of winter wheat crop losses at this time.

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 March corn continues to consolidate ahead of Friday's round of USDA reports, holding above support at its contract low, what also could be called a double-bottom low, at $3.46 1/2 and resistance at a rough double-top near $3.54 1/2. The midpoint of this range is $3.50 1/2, a price the market in general has been comfortable with for what seems like months. Overnight trade saw March corn post a narrow 1 1/4-cent trading range on volume (futures only) of 4,000 contracts. Don't expect many fireworks as Thursday progresses with much of the U.S. Midwest getting blasted by a winter storm, putting delivery of grain on hold, and USDA's reports just around the corner. For more information see DTN's USDA Report Preview, "What Matters Most".

SOYBEANS Soybeans were fractionally mixed early Thursday morning, slowing leaking lower as the overnight session wore on. Wednesday's session saw contracts fall to new lows for this sell-off, with old-crop March moving to $9.51 3/4 (previous low was $9.54 3/4). Pressure continues to come from noncommercial selling, possibly tied to the saber-rattling on trade between U.S. and China. Fundamentally there isn't much fresh news to provide direction as the world waits on USDA's latest reports to get out of the way so attention can return to South American weather. Thursday's session could see soybeans once again gain downside momentum. For more information on USDA's reports see DTN's Report Preview, "What Matters Most". Delivery of another 276 contracts was reported against the January issue, putting the total at 424 contracts.

WHEAT Winter wheat markets were showing small losses early Thursday morning, erasing some of Wednesday's modest rallies. Attention remains on new-crop July contracts with both Chicago (SRW) and Kansas City (HRW) showing solid uptrends on weekly charts. While there continues to be concern over the new-crop in the field, particularly across the U.S. Southern Plains HRW growing area, commercial buyers have largely stayed on the sidelines. Most likely this is due to needing proof that the crop has already been damaged by drought and extreme temperatures, a factor that won't be known until harvest next summer. Still continued noncommercial buying, particularly if a bullish surprise is seen in Friday's planted acres report from USDA, is expected to provide support.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.16	$0.00	-$0.33	Mar	$0.002
Soybeans:	$8.85	-$0.08	-$0.70	Mar	$0.008
SRW Wheat:	$4.03	$0.02	-$0.32	Mar	-$0.002
HRW Wheat:	$3.94	$0.02	-$0.46	Mar	$0.005
HRS Wheat:	$6.14	$0.04	-$0.20	Mar	$0.010

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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