DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was fractionally lower, May soybeans were 4 cents higher, and July Kansas City (HRW) wheat was 8 cents lower.

CME Globex Recap:

If you've been following along this week, and I'm sure you have, you've picked up on the theme of overnight markets. Soybeans are higher, having forgotten how to trade in the red, while corn is near unchanged and wheat is lower. Meanwhile DJIA futures are trading higher, the U.S. dollar index is under pressure, and crude oil does its best attempt to rally.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 293.60 points (1.2%) higher at 24,483.05, the NASDAQ Composite gained 71.22 points (1.0%) to 7,140.25, and the S&P 500 rallied 21.80 points (0.8%) to 2,663.99 Thursday. DJIA futures were 63 points higher early Friday morning. Asian markets closed mixed with Japan's Nikkei 225 up 118.46 points (0.6%), Hong Kong's Hang Seng down 22.90 points and China's Shanghai Composite losing 21.11 points (0.7%). European markets were trading mostly higher with London's FTSE 100 down 4.54 points, Germany's DAX gaining 90.31 points (0.7%), and France's CAC 40 up 22.86 points (0.4%). The euro was 0.0006 higher at 1.2332 while the U.S. dollar index dropped 0.04 to 89.72. June 30-year T-Bonds were 2/32 higher at 145'14 while June gold gained $2.10 to $1,344.00. Crude oil was $0.32 higher at $67.39 as Brent crude rallied $0.30 to $72.32. China's Dalian soybean futures were mostly higher and Malaysian palm oil futures were lower again overnight.

	BULL		BEAR
1)	Corn total marketing year export shipments finally moved above the 4-year average, slightly, in Thursday's weekly report.	1)	The DTN National Corn Index (NCI, national average cash price) is nearing a sell-signal on its daily chart.
2)	The rule in soybeans, at least for now, is the market wants to rally any day ending in "y".	2)	This weekend's forecasted winter storm across the U.S. Midwest and Northern Plains could eventually lead to increased soybean acres planted.
3)	July Kansas City wheat remains in an uptrend on its daily chart, despite this week's sell-off.	3)	July Kansas City wheat could continue to drop, with next technical price support at $5.12.

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 If you are one of those thinking the corn market hasn't done anything this week, with only Friday left to play out, you're correct. A look at the nearby May contract shows us a weekly range from Monday's high of $3.92 1/2 through Thursday's low of $3.85, and sitting at mid-range of $3.88 3/4. Yes, daily charts look to be turning bearish and yes, weekly charts still show what look to be the final stages of an uptrend. But the reality is spillover support from soybeans will likely be the major factor at play heading into the weekend. Sure, the market knows about the oncoming U.S. Midwest and Northern Plains blizzard that could delay planting, seemingly, until June. But that looks to be priced in at this point. Most notable could be a quiet technical development in the DTN National Corn Index (NCI, national average cash price) where its daily chart is showing an approaching bearish crossover by the 20-day and 40-day moving average. The last time these averages posted a bearish crossover was August 3, 2017. Something to keep an eye on at the end of a long and relatively quiet week.

SOYBEANS Soybeans want to be bullish at this time, and nobody is willing to argue with them. Argentina's crop gets smaller with each government report, Brazil is harvesting its crop with prices skyrocketing well above the U.S. market, and the futures market finds new buying interest from both commercial and noncommercial traders on a daily basis. Regarding the latter, it will be interesting to see Friday afternoon's CFTC Commitments of Traders report for positions held as of Tuesday, April 10, or the close of business after the latest USDA Supply and Demand reports were released. It's highly likely this group added substantially to the previously reported position of net-long futures of 210,461 contracts. It's possible Friday's session could see some selling develop, possibly even a lower daily close, but this shouldn't change the longer-term bullish look to the market.

WHEAT As for wheat, there's a chance of rain across the U.S. Southern Plains at the end of next week. That seems to be the popular explanation for this week's sell-off by the July Kansas City (HRW) contract. But that seems to overlook this week's weather of both record lows and record highs across much of the area, mixed with no rain and lots of wind. The more logical explanation for this week's sell-off is actual quite simple, short-term technical signals turned bearish. For now, July KC looks to be in nothing more than a retracement phase of the continued short-term uptrend on its daily chart (see the most recent update to DTN's Technically Speaking blog) with initial support at $5.24, then $5.12. While Friday's session could see pressure continue, possibly leading to a lower close, it would not be surprising to see buying interest reemerge as early as the Sunday night session into Monday morning.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.54	$0.01	-$0.34	May	-$0.005
Soybeans:	$9.89	$0.12	-$0.72	May	-$0.009
SRW Wheat:	$4.50	-$0.06	-$0.31	May	$0.007
HRW Wheat:	$4.68	-$0.09	-$0.40	May	$0.003
HRS Wheat:	$6.12	-$0.05	-$0.11	May	$0.005

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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