DTN Early Word Grains
A Lower Start to the Week
May corn was 2 cents lower, May soybeans were 1 cent lower, and July Kansas City (HRW) wheat was 5 cents lower.
CME Globex Recap:Commodities in general, including the grain and oilseed complex, were lower overnight into early Monday morning. Pressure wasn't tied to the U.S. dollar, as its index was also showing a small loss to start the week. DJIA futures were higher once again, hinting at an extension of the 400 point-plus rally seen last Friday.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
The Dow Jones Industrial Average closed 440.53 points (1.8%) higher at 25,335.74, the NASDAQ Composite gained 132.86 points (1.8%) to 7,560.81, and the S&P 500 rallied 47.60 points (1.7%) to 2,786.57 Friday. DJIA futures were 87 points higher early Monday morning. Asian markets closed higher with Japan's Nikkei 225 up 354.83 points (1.6%), Hong Kong's Hang Seng gaining 598.12 points (1.9%), and China's Shanghai Composite adding 19.53 points (0.6%). European markets were trading mostly higher with London's FTSE 100 off 3.22 points, Germany's DAX up 72.16 points (0.6%), and France's CAC 40 up 9.77 points (0.2%). The euro was 0.0007 higher at 1.2314 while the U.S. dollar index slipped 0.04 to 90.07. March 30-year T-Bonds were unchanged at 144'05 while April gold dropped $6.10 to $1,318.00. Crude oil was $0.33 lower at $61.71 as Brent crude dipped $0.40 to $65.09. China's Dalian soybean futures were lower and Malaysian palm oil futures were mixed overnight.
| BULL | BEAR | ||
| 1) | If soybeans rally Monday, look for corn to follow. | 1) | Old-crop corn gapped lower on its daily chart overnight, a bearish short-term technical signal. |
| 2) | Production projections for Argentina's soybean crop are expected to decrease again this week. | 2) | Commercial selling continues to pressure the soybean market. |
| 3) | Weather hasn't changed across the U.S. Southern Plains, putting additional stress on the HRW wheat crop. | 3) | Old-crop wheat stocks, domestic in particular, continue to weigh on the markets. |
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 Corn was showing a solid loss, at least for corn, of 2 cents early Monday morning. From a short-term technical point of view, the old-crop May contract left a bearish gap on its daily chart between Friday's low of $3.89 3/4 and the overnight high of $3.89 1/2. Short-term momentum indicators are also showing a minor downtrend on daily charts for both May and new-crop December, though both could easily be convinced to rally if soybeans were to find new buying interest. Fundamentally not much has changed as traders now turn their attention to the Quarterly Stocks report at the end of the month. Delivery of 38 contracts was reported against the March issue, putting the total at 1,097 contracts.
SOYBEANS Soybeans were lower early Monday morning, though contracts had rallied off overnight session lows. As is the case with most weather market spikes, increased pressure is coming from commercial selling indicated by a stronger carry in old-crop soybeans' forward curve. Technically, both old-crop May and new-crop November are in short-term downtrends on their respective daily charts, with next support for the November at $10.17 1/4 (the overnight low was $10.24 1/4). Traders will continue to watch forecasts for Argentina's crop, though not so much weather as to ever-changing production projections. Also, the old-crop market will keep an eye this week on the still somewhat sluggish pace of U.S. exports. There were no deliveries reported against the March soybean issue, leaving its total at 821 contracts. March soybean meal saw another 9 contracts delivered (total of 860 contracts) while March soybean oil came in at 15 contracts (total of 5,125 contracts).
WHEAT Winter wheat markets were lower again early Monday morning, pressured by continued noncommercial selling. New-crop July Kansas City is in a well-defined minor (short-term) downtrend on its daily chart, breaking below initial support at $5.35 1/2 to set its sights on next support near $5.17 1/4. Fundamentally there isn't much change to the wheat complex with large supplies of old-crop still in command over condition concerns for new-crop. Look for this to continue through the Quarterly Stocks report at the end of the month.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.53 | -$0.03 | -$0.37 | May | -$0.005 |
| Soybeans: | $9.60 | -$0.25 | -$0.79 | May | -$0.006 |
| SRW Wheat: | $4.54 | -$0.09 | -$0.35 | May | $0.006 |
| HRW Wheat: | $4.74 | -$0.13 | -$0.47 | May | $0.001 |
| HRS Wheat: | $5.97 | -$0.07 | -$0.21 | May | $0.006 |
Darin Newsom can be reached at darin.newsom@dtn.com
Darin can be followed throughout the day at www.twitter.com\DarinNewsom
(KR)
Copyright 2018 DTN/The Progressive Farmer. All rights reserved.