DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally lower, March soybeans were 5 cents lower, and July Kansas City (HRW) wheat was 2 cents lower.

CME Globex Recap:

As the world, or at least the U.S., waits for Punxsutawney Phil to make his weather prediction early Friday morning, the grain and oilseed complex continued to grind lower. Most of the selling was again seen in oilseeds with everything from Canadian canola to Malaysian palm oil under pressure. Selling in Chicago was led by soybeans, with wheat under early pressure once again and corn doing its corny thing. The U.S. dollar was actually stronger for a change, putting pressure on both metals and energies. DJIA futures were down more than 200 points, teasing another volatile day in stock markets.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 37.32 points (0.1%) higher at 26,186.71, the NASDAQ Composite lost 25.62 points (0.4%) to 7,385.86, and the S&P 500 dipped 1.83 points to 2,821.98 Thursday. DJIA futures were 231 points lower early Friday morning. Asian markets closed mostly lower with Japan's Nikkei 225 down 211.58 points (0.9%), Hong Kong's Hang Seng falling 40.31 points (0.1%), and China's Shanghai Composite adding 15.10 points (0.4%). European markets were trading lower with London's FTSE 100 down 23.63 points (0.3), Germany's DAX falling 166.23 points (1.3%), and France's CAC 40 off 68.53 points (1.3%). The euro was 0.0016 lower at 1.2490 as the U.S. dollar index gained 0.20 to 88.86. March 30-year T-Bonds were 18/32 lower at 146'00 while April gold added $0.20 to $1,348.10. Crude oil was $0.01 higher at $65.81 and Brent crude lost $0.14 to $69.51. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

	BULL		BEAR
1)	Corn remains in a secondary (intermediate-term) seasonal uptrend.	1)	Corn contracts remain in position to roll over into short-term downtrends.
2)	South American weather could remain a bullish issue for soybeans heading into the weekend.	2)	Short-term downtrends in soybeans are gain momentum.
3)	New-crop winter wheat contracts remain in uptrends on weekly charts.	3)	Winter wheat's short-term trends are also set to turn down.

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 In an unusual twist, the corn market was quiet overnight with new-crop December awaiting Punxsutawney Phil's weather proclamation early Friday morning. Both old-crop and new-crop were showing small losses as traders were hesitant to take a big position into what is expected to be an incredibly volatile morning based on Phil's announcement. Needless to say, we are all on pins and needles as the announcement nears. Meanwhile, from a technical point of view, both old-crop March and new-crop December contracts were in position to establish short-term downtrends Friday if they stay lower through the day's close. Of course they were in the same position 24 hours ago before finishing fractionally higher, putting off what looks to be an inevitable change in minor trends. The catalyst today, of course, could be Phil.

SOYBEANS Soybean contracts were lower early Friday, giving back most of the ground gained after spiking off Thursday's lows. Both old-crop March and new-crop November are in minor (short-term) downtrends on daily charts with next support levels pegged at $9.74 3/4 and $9.93 1/2 respectively, meaning both have roughly another nickel down to technical support. At least some of the pressure in the old-crop market is coming from commercial selling as indicated by the carry in the March-to-May spread that looks to be ready to post a new low below the 11 1/2-cent mark on its weekly close-only chart. The spread was sitting at an 11 1/2-cent carry early Friday, covering approximately 77% of calculated full commercial carry.

WHEAT The wheat complex was lower early Friday, though selling interest seemed less than exuberant. Minneapolis spring wheat was indicating commercial traders changed their minds from Thursday, with a stronger carry in spreads erasing much of the gains seen the previous day. However, a lack of trade volume was likely at work in pulling the nearby contract down 4 cents while losing ground to deferred issues. Winter wheat markets were a couple cents lower, continuing the string of lower days following Wednesday's lunar eclipse (for more on this, see this week's Newsom on the Market column later Friday morning). Technically both new-crop July Kansas City and Chicago contracts remain in secondary (intermediate-term) uptrends on weekly charts while minor (short-term) trends on daily charts look to be turning down.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.31	$0.00	-$0.31	Mar	$0.001
Soybeans:	$9.17	-$0.11	-$0.68	Mar	$0.001
SRW Wheat:	$4.22	-$0.01	-$0.29	Mar	-$0.004
HRW Wheat:	$4.25	-$0.01	-$0.42	Mar	-$0.009
HRS Wheat:	$5.95	$0.05	-$0.16	Mar	$0.009

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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