DTN Early Word Grains
A Change of Pace Early Monday
May corn was fractionally lower, May soybeans were 1 cent lower, and July Kansas City (HRW) wheat was 3 cents lower.
CME Globex Recap:A weekend full of pundits and economists talking about the merits and problems of an import tariff led to markets looking tired overnight into Monday morning. Despite no change in weather across the U.S. Southern Plains and Argentina, the grain and oilseed complex saw an initial rally erased. DJIA futures were under pressure, again, while the U.S. dollar index moved from slightly lower to slightly higher. Gold and crude oil were still showing small, uninspired gains.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 70.92 points (0.3%) lower at 24,538.06, the NASDAQ Composite gained 77.31 points (1.1%) to 7,257.87, and the S&P 500 rallied 13.58 points (0.5%) to 2,691.25 Friday. DJIA futures were 26 points lower early Monday morning. Asian markets closed mostly lower with Japan's Nikkei 225 down 139.55 points (0.7%), Hong Kong's Hang Seng falling 697.06 points (2.3%), and China's Shanghai Composite up 2.40 points. European markets were trading mostly higher with London's FTSE 100 up 29.38 points (0.4%), Germany's DAX gaining 107.68 points (0.9%), and France's CAC 40 adding 23.93 points (0.5%). The euro was 0.0012 lower at 1.2309 while the U.S. dollar index gained 0.04 to 90.02. March 30-year T-Bonds were 5/32 higher at 144'19 while April gold added $3.30 to $1,326.70. Crude oil was $0.33 higher at $61.58 as Brent crude rallied $0.23 to $64.60. China's Dalian soybean futures were mostly lower and Malaysian palm oil futures were lower overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Corn remains a bullish weather market, with a large assist to soybeans, meaning buyers could return this week. | 1) | Once one gets past the weather market, fundamentals remain bearish for corn. |
| 2) | Another weekend has passed with little to no rain across Argentina's key soybean growing areas. | 2) | Soybean traders will continue to monitor the volatile trade war situation between the U.S. and China. |
| 3) | Weather was harsh across much of the U.S. Southern Plains HRW wheat growing area this past weekend. | 3) | The bottom line for wheat is domestic old-crop ending stocks are still projected at greater than 1.0 bb. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN It's hard to read much into corn's quiet overnight session that saw contracts trading lower early Monday morning. Technically, both old-crop and new-crop markets look ready to roll over into downtrends on daily (short-term) and weekly (intermediate-term) charts, though another burst from soybeans this week could continue to delay bearish moves. Fundamentally there is little change as the pace of U.S. exports remains slow while global traders continue to worry about South American production. This week brings the next round of monthly USDA estimates regarding both (exports, global production), with attention immediately turning to new-crop ahead of the end of the month. Delivery of 525 contracts was reported against the March issue, putting the total at 600 contracts.
SOYBEANS Soybean contracts were mixed with old-crop showing small losses and new-crop small gains early Monday morning. This week looks to be little different than the two months (or so) that have preceded it as traders continue to focus on Argentine rain, or lack thereof. Long-term traders will monitor this week's developments regarding tariffs and trade, with chatter between the U.S. and China continuing over the weekend. Technically old-crop and new-crop markets are overbought on daily (short-term) and weekly (intermediate-term) price charts, though both are showing uptrends based on solid noncommercial buying. Delivery of another 530 contracts was reported against the March soybean issue, putting its total at 821 contracts. March soybean meal saw another 150 contracts delivered (total of 407 contracts) while March soybean oil came in at 402 contracts (total of 4,847 contracts).
WHEAT Winter wheat markets were lower again early Monday despite another weekend of harsh weather across the U.S. Southern Plains. Warm temperatures combined with strong winds and no rain to put a lot of dirt in the air as winter wheat fields continue to be wiped clean. Still, this wasn't enough to maintain an early overnight rally in the futures market, with the July Kansas City contract finding renewed selling interest near $5.50. Similar to corn and soybeans, the contract is overbought on its daily (short-term) and weekly (intermediate-term) charts meaning when traders take a break from buying into weather the market could come under pressure.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.49 | -$0.01 | -$0.37 | May | $0.000 |
| Soybeans: | $9.92 | $0.03 | -$0.79 | May | -$0.001 |
| SRW Wheat: | $4.63 | -$0.15 | -$0.37 | May | $0.008 |
| HRW Wheat: | $4.86 | -$0.04 | -$0.48 | May | $0.054 |
| HRS Wheat: | $5.99 | -$0.13 | -$0.22 | May | $0.018 |
Darin Newsom can be reached at darin.newsom@dtn.com
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