DTN Early Word Grains
Grains Hold Overnight Gains
March corn was 2 cents higher, March soybeans were 11 cents higher, and July Kansas City (HRW) wheat was 7 cents higher.
CME Globex Recap:A stronger U.S. dollar overnight into Monday morning did little to slow the rally in the grain and oilseed complex. Soybeans posted a solid double-digit rally on South American weather, followed by winter wheat tied to U.S. weather, and finally corn. Gold and energies were lower, though selling was relatively quiet. DJIA futures also turned lower overnight following last Friday's 200 point-plus rally by the Big Board.
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The Dow Jones Industrial Average closed 223.93 points (0.9%) higher at 26,616.71, the Nasdaq Composite gained 94.61 points (1.3%) to 7,505.77, and the S&P 500 rallied 33.62 points (1.2%) to 2,872.87 Friday. DJIA futures were 29 points lower early Monday morning. Asian markets closed mixed with Japan's Nikkei 225 slipping 2.54 points, Hong Kong's Hang Seng down 187.23 points (0.6%), and China's Shanghai Composite off 35.13 points (1.0%). European markets were trading mostly lower with London's FTSE 100 up 10.45 points (0.1%), Germany's DAX down 34.71 points (0.3%), and France's CAC 40 off 6.34 points (0.1%). The euro was 0.0024 lower at 1.2402 as the U.S. dollar index gained 0.23 to 89.25. March 30-year T-Bonds were 1 3/32 lower at 147'22 while February gold lost $7.00 to $1,345.10. Crude oil was $0.25 lower at $65.89 and Brent crude lost $0.56 to $69.96. China's Dalian soybean futures were mixed and Malaysian palm oil futures were higher overnight.
| BULL | BEAR | ||
| 1) | Uptrends on corn's daily and weekly charts are gaining momentum. | 1) | Corn contracts are nearing the high-side of sideways trading ranges and may not have the fundamentals to push much higher. |
| 2) | Dry forecasts in Argentina sparked a solid overnight rally in soybeans. | 2) | The overnight buying in soybeans has not erased short-term bearish technical signals established late last week. |
| 3) | Uptrends on new-crop winter wheat weekly chart continue to strengthen. | 3) | If the U.S. dollar index tries to strengthen this week, it could slow buying interest in the wheat complex. |
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 corn market was higher early Monday morning with contracts extending both minor (short-term) trends on daily charts and secondary (intermediate-term) uptrends on weekly charts. Old-crop March is moving toward minor resistance at $3.60 1/2 (high from Dec. 4) and secondary resistance at $3.64 1/2 (the 23.6% retracement level of its previous secondary downtrend). New-crop December corn is already testing its initial upside targets (both minor and secondary) near $3.91. Support is coming from forecasts of dry weather for Argentina this week, a factor that also sparked a solid rally in soybeans overnight. Seasonally corn is in a timeframe when it tends to rally, both old-crop cash and according to new-crop's 10-year seasonal study. The DTN National Corn Index was calculated at $3.25 Friday evening, putting it 31 1/2 cents under the close of March (1/4 cent gain for the week) and 48 1/4 cents under the July (unchanged for the week).
SOYBEANS Soybeans started the overnight session strong and built momentum through early Monday morning. Old-crop March quickly erased losses seen at the end of last week, though minor (short-term) technical signals continue to show the contract in a downtrend on its daily chart. The same could be said for new-crop November with resistance now at Thursday's high of $10.15 ($10.02 in the March). Fundamentally, the driver seems to be dry forecasts for Argentina this week, though the recent weakness of the U.S. dollar versus the Brazilian real is also likely providing support. Last Friday's weekly export sales and shipment updated (through Jan. 18) showed total sales running 13% behind and total shipments off 14% from last marketing year. National average basis softened slightly with the DTN National Soybean Index calculated at $9.17 Friday evening, putting it 68 1/2 cents under the March and 80 cents under the May. This was a 1/4 cent and 1/2 cent weaker respectively. Meanwhile the nearby March-to-May futures spread continues to cover more than 70% of calculated full commercial carry while the spread itself continues to trend down (strengthening carry).
WHEAT The wheat complex was higher overnight into early Monday, once again led by the Kansas City HRW market. There the secondary (intermediate-term) uptrend of the new-crop July contract continues to strengthen with its next upside target near $4.83 1/2. Weather forecasts remain dry and windy for the U.S. Southern Plains, with parts of the HRW growing area well past 100 days since the last round of measurable precipitation. The Chicago market followed Kansas City closely, also receiving spillover support from the overnight rally in corn and soybeans.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.25 | $0.01 | -$0.31 | Mar | -$0.003 |
| Soybeans: | $9.17 | -$0.07 | -$0.68 | Mar | -$0.001 |
| SRW Wheat: | $4.11 | $0.07 | -$0.30 | Mar | $0.001 |
| HRW Wheat: | $4.03 | $0.09 | -$0.40 | Mar | $0.015 |
| HRS Wheat: | $5.97 | $0.04 | -$0.17 | Mar | -$0.003 |
Darin Newsom can be reached at darin.newsom@dtn.com
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