DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

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

CME Globex Recap:

Grain and oilseed markets are doing impersonations early Thursday morning with wheat trying to be a bull market, soybeans pulling off a strong corn impression, and corn convincing everyone it's actually a door knob. The net result of this overnight talent show is a solidly mixed morning. In other news, cotton is pretending to be cattle as it posts a strong triple-digit rally. Gold and crude oil are both lower, despite a weaker U.S. dollar and DJIA futures are near unchanged following Wednesday's 300 point-plus rally by the big board.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 322.79 points (1.3%) higher at 26,115.65, the NASDAQ Composite gained 74.59 points (1.0%) to 7,298.28, and the S&P 500 gained 26.14 points (0.9%) to 2,802.56 Wednesday. DJIA futures were 2 points higher early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei 225 down 104.97 points (0.4%), Hong Kong's Hang Seng up 138.53 points (0.4%), and China's Shanghai Composite adding 30.08 points (0.9%). European markets were trading mostly higher with London's FTSE 100 off 30.99 points (0.4%), Germany's DAX up 55.98 points (0.4%), and France's CAC 40 gaining 8.99 points (0.2%). The euro gained 0.0044 to 1.2232 as the U.S. dollar index fell 0.36 to 90.62. March 30-year T-Bonds were 19/32 lower at 149'23 while February gold fell $8.80 to $1,330.40. Crude oil was $0.03 lower at $63.94 while Brent crude lost $0.08 to $69.29. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

	BULL		BEAR
1)	Corn contracts are looking at potential bullish breakouts following Wednesday's rally.	1)	Could we see a "Turnaround Thursday" in corn?
2)	China's latest GDP reading for 2017 came in above expectations, possibly providing support to soybeans.	2)	The Trump administration is talking about taking retaliatory trade actions against China, headlines that could keep the U.S. soybean market on edge.
3)	Temperatures across the U.S. Southern Plains HRW wheat growing area could rise nearly 100 degrees above what was seen Tuesday.	3)	Winter wheat is a winter crop, meaning it's still too early to get overly concerned by fluctuating weather.

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MORE COMMODITY-SPECIFIC COMMENTS

CORN Corn didn't do much overnight. In fact, that's an understatement. It is more correct to say corn did next to nothing since opening Wednesday through this writing early Thursday morning. March corn posted a 1/2 cent trading range of volume (futures only) of only 4,200 contracts. New-crop December was equally quiet, also moving a 1/2 cent on volume of only 500 contracts. Technically the interest has moved to weekly charts following Wednesday solid rally, with both March and December now within striking distance of establishing new 4-week highs above $3.54 3/4 and $3.87 1/2 respectively. The pattern on December's chart is cleaner given it didn't just post a new contract low, as is the case for March. Analysts will keep a close eye on corn Thursday to see how the market reacts to Wednesday's move.

SOYBEANS Overnight trade in soybeans sounds a lot like what usually happens in corn: Old-crop March posted a narrow 1 1/2-cent trading range on light volume (futures only) of 4,900 contracts. The key to Thursday's session, from a technical point of view, is if March can get above Tuesday's high of $9.70. This could trigger a new round of selling, enough to extend the contract's minor (short-term) uptrend on its daily chart. Next resistance is pegged at $9.76, then $9.85 1/2. A similar pattern is seen in new-crop November with targets sitting near $9.95 1/2 and $10.02 1/4. Fundamentally there isn't much fresh news, though traders will continue to monitor trade war talk between the U.S. administration and China's government. The story came out Wednesday afternoon that the Trump administration was looking at retaliatory measures against China for alleged theft of intellectual property. On a more bullish note, reports of China's latest GDP reading for 2017 came in at 6.9%, beating estimates of 6.7%.

WHEAT Chicago (SRW) wheat is doing a good impression of a bullish market early Thursday, with overnight gains indicating continued commercial buying interest. The reality is futures spreads could be skewed by low volume, particularly overnight, so the weakening carry seen could evaporate as the morning progresses. Still, new-crop July contracts for both Chicago and Kansas City (HRW) are showing uptrends on their respective weekly charts, with both holding recent tests of lows before rallying. It is important this week for these new-crop contracts to continue to build bullish momentum, and most likely they will. Support could still be tied to the ever changing weather, with parts of the U.S. Southern Plains expected to be almost 100 degrees (Fahrenheit) above what they were two days ago. This could certainly stress the HRW crop, particularly given the recent cold blast and ongoing lack of moisture of any sort.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.21	$0.05	-$0.32	Mar	$0.004
Soybeans:	$9.00	$0.01	-$0.68	Mar	$0.000
SRW Wheat:	$3.89	$0.03	-$0.33	Mar	-$0.018
HRW Wheat:	$3.82	$0.06	-$0.45	Mar	$0.009
HRS Wheat:	$5.92	$0.01	-$0.20	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

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