DTN Early Word Grains

Beans Stay Strong All Night Long

6:00 a.m. CME Globex:

March corn was 3 cents higher, March soybeans were 18 cents higher, and July Kansas City (HRW) wheat was 8 cents higher.

CME Globex Recap:

Little to no rain across Argentina this past weekend sparked a sharp rally in soybeans to start the overnight session, and the market didn't look back through early Monday morning. The wheat complex also posted a solid rally, led by Kansas City (HRW). Corn traded higher as it rode the coattails of soybeans.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 330.44 points (1.4%) higher at 24,190.90, the Nasdaq Composite gained 97.33 points (1.4%) to 6,874.49, and the S&P 500 rallied 38.55 points (1.5%) to 2,619.55 Friday. DJIA futures were 285 points higher early Monday morning, hinting at another explosive session to start the week. Asian markets closed mostly lower with Japan's Nikkei 225 closed, Hong Kong's Hang Seng down 47.79 points (0.2%), and China's Shanghai Composite up 24.27 points (0.8%). European markets were trading higher with London's FTSE 100 up 210.74 points (1.7%), Germany's DAX gaining 74.22 points (1.5%), and France's CAC 40 adding 5.40 points (1.5%). The euro was 0.0021 higher at 1.2272 while the U.S. dollar index lost 0.14 to 90.19. March 30-year T-Bonds were 24/32 lower at 143'13 while April gold rallied $6.60 to $1,322.30. Crude oil was $1.07 higher at $60.27 and Brent crude added $0.95 to $63.74. China's Dalian soybean and Malaysian palm oil futures were both higher again overnight.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

BULL BEAR
1) Spillover buying from soybeans supported corn overnight. 1) Slower-than-expected export demand remains an issue for corn.
2) Continued dry weather in Argentina over the weekend sparked strong buying in both soybean meal and soybeans overnight. 2) Similar to corn, total marketing year exports of soybeans to this point have been slower than needed.
3) July Kansas City (HRW) found renewed buying interest overnight on continued dry weather across the U.S. Southern Plains. 3) National average basis for all three major wheat classes weakened last week.

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 Corn didn't do much overnight, compared to activity seen in soybeans and wheat. Both old-crop and new-crop markets were 3 cents higher but unable to take out previous highs. For old-crop March that means Thursday's $3.67 3/4 should continue to hold as the contract still shows technical signs of being in a minor (short-term) downtrend on its daily chart. Fundamentally, old-crop has seen renewed commercial buying of late, indicated by the weakening carry in the March-to-May and May-to-July futures spreads. Last Friday saw the national average basis (DTN National Corn Index minus nearby futures) calculated at 30 1/2 cents under, roughly 1/4 cent stronger than the previous week. This increasingly less bearish view of fundamentals could continue to lead noncommercial traders to add to their net-long futures position with last Friday's CFTFC Commitment of Traders report (legacy, futures only) showing this position growing by 34,316 contracts to a total of 48,070 contracts as of the close Tuesday, Feb. 6.

SOYBEANS Soybeans exploded higher overnight, led by old-crop March gaining almost 20 cents through early Monday morning. Buying was seen on the open Sunday night, sparked by little to no rain over the weekend in key growing areas of Argentina. Some of the buying in soybeans was due to a similarly strong rally in soybean meal, with nearby March gaining more than $10 over Friday's close as the overnight session progressed. On its daily chart, March soybeans have not taken out the previous high of $10.04 3/4, though they are expected to challenge this mark during Monday's session. The market has seen improved commercial buying of late, indicated by the slightly weaker carry in both the March-to-May and May-to-July futures spreads as well as a slowly firming national average basis. The DTN National Soybean Index was calculated last Friday at $9.14 1/2, putting national average basis at 68 1/2 cents under the March. The previous Friday saw national average basis come in at roughly 69 cents under.

WHEAT The U.S. Southern Plains remain dry, sparking renewed buying interest in Kansas City (HRW) wheat. Technically, new-crop July is pushing toward resistance on its weekly chart at $5.10 as it posted an overnight high of $5.08 3/4. Fundamentally, there is little other news besides weather at this time to drive new-crop. As for old-crop wheat, March Chicago (SRW) was holding nearing its technical resistance mark of $4.56 1/4, climbing to $4.60 1/2 overnight before pulling back a bit. Light commercial buying has been seen in the SRW market of late with the carry in the March-to-May futures spread trimmed to a still bearish 11 3/4 cents. National average basis for all three major wheat classes (HRW, SRW, and HRS) all weakened last week.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.32 -$0.03 -$0.30 Mar $0.005
Soybeans: $9.14 -$0.04 -$0.69 Mar $0.005
SRW Wheat: $4.19 -$0.09 -$0.30 Mar -$0.017
HRW Wheat: $4.23 -$0.10 -$0.42 Mar -$0.008
HRS Wheat: $5.86 -$0.12 -$0.18 Mar -$0.020

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

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

(KR)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]