DTN Early Word Grains
Different, But the Same
May corn was 1 cent lower, May soybeans were 3 cents higher, and July Kansas City (HRW) wheat was 10 cents lower.
CME Globex Recap:Another early morning, another early morning with markets similar to what they were 24 hours before. Soybeans erased Wednesday's late sell-off while corn was, you guessed it, quietly lower. Winter wheat, though, was sharply lower led by the Kansas City market. One change was in financial markets with gold down almost double-digits while the U.S. dollar index rallied on talk of steeper interest rate hikes by the FOMC.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 218.55 points (0.9%) lower at 24,189.45, the NASDAQ Composite lost 25.27 points (0.4%) to 7,069.03, and the S&P 500 fell 14.68 points (0.6%) to 2,642.19 Wednesday. DJIA futures were 32 points higher early Thursday morning. Asian markets closed mostly lower with Japan's Nikkei 225 down 26.82 points (0.1%), Hong Kong's Hang Seng off 66.43 points (0.2%) and China's Shanghai Composite losing 27.92 points (0.9%). European markets were trading mostly lower with London's FTSE 100 down 1.27 points, Germany's DAX off 0.18 point, and France's CAC 40 off 1.52 points. The euro was 0.0031 lower at 1.2338 while the U.S. dollar index gained 0.24 to 89.75. June 30-year T-Bonds were 1/32 higher at 146'05 while June gold lost $8.00 to $1,352.00. Crude oil was $0.30 higher at $67.12 as Brent crude gained $0.24 to $72.30. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.
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| BULL | BEAR | ||
| 1) | Look for another big corn export sales number in USDA's weekly update Thursday morning (through the week ending Thursday, April 5). | 1) | Corn contracts established short-term sell signals on daily charts at Wednesday's close. |
| 2) | Everyone is buying U.S. soybeans these days. The party is expected to continue Thursday. | 2) | The pace of U.S. soybean export shipments is expected to still be behind projections in this week's update (for the week ending Thursday, April 5). |
| 3) | Kansas City July wheat closed a price gap, is poised for three down days against an uptrend, and held retracement support overnight. All bullish. | 3) | In general, U.S. wheat continues to deal with bearish fundamentals. |
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 Yes, corn contracts established minor (short-term) sell signals at Wednesday's close but don't look for heavy selling to hit the market. At least not yet. Spillover support, albeit light, from soybeans was seen overnight offsetting some of the spillover pressure from wheat. So while corn's daily charts could be considered bearish there are still enough bullish factors at play to keep the market from collapsing. First and foremost is strong export sales. Thursday morning brings the latest weekly update from USDA, with marketing year total sales already sitting at 1.892 bb. Shipments are running behind projected pace, meaning there is quite a buildup of outstanding sales to deal with at some point.
SOYBEANS Everyone's buying U.S. soybeans these days. "Unknown" pops up nearly every day with an announced purchase, China still makes an appearance, and Argentina has a 2-day streak going that could easily extend to 3 days later Thursday morning. On the paper side, noncommercial traders likely increased their net-long futures holdings substantially through this past Tuesday's close, a position that will show up in Friday afternoon's CFTC Commitments of Traders report. The commercial side has also been busy, with the July-to-August futures spread moving to an inverse while the new-crop November-to-January sits at a weak carry of only 3 1/2 cents. Thursday's weekly export sales and shipment update is expected to show a still slow shipment pace and another possible strong sales number for last week. Like corn, soybeans' outstanding sales are growing large and will need to be dealt down the road.
WHEAT Kansas City (HRW) wheat was posting a double-digit loss early Thursday morning, due in large part to selling tied to its short-term daily chart. However, futures spreads were showing a stronger carry hinting at some commercial selling as well. New-crop July was testing support at $5.24, a price that marks the 33% retracement level of the contract's recent rally from $4.75 1/2 through this past Monday' high of $5.47 3/4. The contract also closed a price gap on its daily chart overnight, and Thursday would be the third consecutive lower close against the short-term uptrend. With weather forecasts not expected to change heading into the weekend, this could bring buyers back as soon as Thursday's overnight trade into Friday morning.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.53 | -$0.02 | -$0.34 | May | $0.002 |
| Soybeans: | $9.77 | -$0.03 | -$0.71 | May | -$0.007 |
| SRW Wheat: | $4.55 | -$0.05 | -$0.32 | May | -$0.003 |
| HRW Wheat: | $4.77 | -$0.05 | -$0.40 | May | $0.005 |
| HRS Wheat: | $6.17 | $0.03 | -$0.12 | May | $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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