DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

July corn was fractionally higher, July soybeans were 1 cent lower, and July Kansas City (HRW) wheat was 4 cents higher.

CME Globex Recap:

The grain and oilseed complex was relatively quiet overnight into Wednesday morning with wheat higher, soybeans showing a small loss, and -- you guessed it --- corn within fractions of Tuesday's close. The energy complex was a bit more active as crude oil rallied. Meanwhile, gold was quietly lower as the U.S. dollar index rallied.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 213.59 points (0.9%) higher at 24,786.63, the NASDAQ Composite gained 124.82 points (1.7%) to 7,281.10, and the S&P 500 rallied 28.55 points (1.1%) to 2,706.39 Tuesday. DJIA futures were 45 points higher early Wednesday morning. Asian markets closed higher with Japan's Nikkei 225 up 310.61 points (1.4%), Hong Kong's Hang Seng gaining 221.50 points (0.7%), and China's Shanghai Composite adding 24.60 points (0.8%). European markets were trading mostly higher with London's FTSE 100 up 53.65 points (0.7%), Germany's DAX down 6.61 points, and France's CAC 40 up 11.02 points (0.2%). The euro was 0.0003 lower at 1.2367 while the U.S. dollar index gained 0.18 to 89.66. June 30-year T-Bonds were 13/32 lower at 145'20 while June gold slipped $1.20 to $1,348.30. Crude oil was $0.56 higher at $67.08 as Brent crude added $0.48 to $72.06. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.

	BULL		BEAR
1)	Corn was able to find light buying interest during a quiet overnight session.	1)	New-crop December corn has moved into downtrends on both its short-term daily and intermediate-term weekly charts.
2)	Soybean futures spreads beyond the nearby May-to-July continue to reflect a bullish commercial outlook.	2)	Given short-term technical patterns in both old-crop and new-crop soybeans, selling could return during Wednesday's session.
3)	The U.S. Southern Plains HRW wheat growing area is starting to resemble the Dust Bowl days, with walls of dirt riding on the unyielding wind.	3)	Despite all the weather woes, the carry in the Kansas City July-to-September futures spread has strengthened beyond 20 cents.

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 was quietly higher overnight, with old-crop July holding near the midpoint ($3.90) of its range between $4.02 3/4 (high from March 13) and $3.77 1/2 (low from March 23). It's interesting to note, from a technical perspective, trade volume for the July contract increased during Tuesday's modest sell-off, activity that seemed to include commercial selling. Both the May-to-July and July-to-September futures spreads are in downtrends on their respective weekly close-only charts, meaning their carries continue to strengthen. The May-to-July has moved out to its widest market of a 9-cent carry. As for new-crop December, the argument could be made the contract is now in a downtrend on both its short-term daily and intermediate-term weekly charts. Also, the carry in the December-to-March futures spread has seen its carry strengthen this week, though still holding at a neutral level of calculated full commercial carry.

SOYBEANS Soybeans were quietly lower overnight into Wednesday morning, poised for a possible larger sell-off as the day progresses. This is based on the short-term technical pattern on daily charts that shows minor consolidation following the initial sell-off seen Monday. If selling does escalate next support for the July contract is near $10.42 1/2, then $10.27 1/2. Initial support for new-crop November is near $10.38 1/4, then the bottom of a price gap from April 6 at $10.35 1/2, and finally near $10.24 3/4. Fundamentally there is little change in the markets with the old-crop May-to-July futures spread showing a bearish carry while the weak carry of the new-crop November-to-January spread covers only a bullish level of calculated full commercial carry.

WHEAT Recent rains across the U.S. Southern Plains must not have done much to improve the situation, as spreading fires in the area show it to be a tinder box still. Yes, parts of the HRW wheat growing are still forecast to see rain late this week into the weekend, but as one farmer from the southwest Kansas put it in a message last night, "You can see this wall of dirt and wind coming from the northwest. It's kind of eerie." The new-crop July Kansas City contract has partially recovered from its recent sell-off, climbing back above technical support at $5.00. However, the contract still has a ways to go to regain its bullish momentum.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.47	-$0.02	-$0.33	May	$0.006
Soybeans:	$9.75	$0.04	-$0.71	May	$0.002
SRW Wheat:	$4.36	$0.04	-$0.31	May	$0.003
HRW Wheat:	$4.41	$0.02	-$0.39	May	-$0.006
HRS Wheat:	$6.01	$0.06	-$0.11	May	$0.000

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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