DTN Early Word Grains
A Little Here and a Little There
July corn was 1 cent lower, July soybeans were 1 cent lower, and July Kansas City (HRW) wheat was 5 cents lower.
CME Globex Recap:The grain and oilseed complex was mostly loser early Tuesday morning, with winter wheat markets posting the largest loss. Corn, soybeans, and spring wheat were within fractions of Monday's close after most contracts posted narrow trading ranges. Kansas City and Chicago wheat, though, were down 5 cents and 3 cents respectively. Metals and energies were mostly higher, the latter following through on activity seen late in Monday's session.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
The Dow Jones Industrial Average closed 14.25 points (0.1%) lower at 24,448.69, the NASDAQ Composite lost 17.53 points (0.2%) to 7,128.60, and the S&P 500 rallied 0.15 point to 2,670.29 Monday. DJIA futures were 108 points higher early Tuesday morning. Asian markets closed higher with Japan's Nikkei 225 up 190.08 points (0.9%), Hong Kong's Hang Seng gaining 381.84 points (1.3%), and China's Shanghai Composite adding 60.92 points (2.0%). European markets were trading mostly higher with London's FTSE 100 up 22.42 points (0.3%), Germany's DAX gaining 40.18 points (0.3%), and France's CAC 40 off 4.66 points (0.1%). The euro was 0.0006 higher at 1.2214 while the U.S. dollar index slipped 0.05 to 90.88. June 30-year T-Bonds were 5/32 higher at 143'04 while June gold gained $4.90 to $1,328.90. Crude oil was $0.41 higher at $69.05 as Brent crude rallied $0.25 to $74.96. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.
| BULL | BEAR | ||
| 1) | December corn continues to hold above minor (short-term) technical support on its daily chart. | 1) | A strengthening carry in new-crop corn's December-to-March spread should lead to Dec corn breaking initial support and moving below $4.00. |
| 2) | Clearing weather has allowed planting season to get under way in the U.S., theoretically diminishing some of the talk of increased soybean acres. | 2) | As planting in the U.S. gets under way, there are reports planters are initially loaded with soybeans rather than corn. |
| 3) | Recent rains across the U.S. Southern Plains HRW wheat growing area were largely less than forecast. | 3) | The July Kansas City wheat contract is nearing a bearish breakdown on its short-term daily chart. |
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 New-crop December corn was fractionally lower overnight, holding near initial minor (short-term) technical support at $4.02 1/4. This price was also the contract's low the last two sessions, and with daily stochastics (short-term momentum study) still bearish it seems highly likely the contract will push through this support to test the next target of $3.97 3/4. Weather across much of the U.S. Plains and Midwest is clearing allowing spring planting to start rolling. Light pressure has been seen in the new-crop December-to-March futures spread of late, its carry sitting at 7 1/2 cents early Tuesday morning. This covers roughly 60% of calculated full commercial carry, still neutral but getting closer to the bearish level of 67%.
SOYBEANS While old-crop soybean contracts were showing small losses, new-crop November was posting a fractional gain early Tuesday morning. However, the contract had rallied a couple cents off its overnight low of $10.26, a test of both Monday's low ($10.25 3/4) and minor (short-term) technical support on its daily chart near $10.24 3/4. Nov soybeans could actually find support in the clearing weather for the U.S. Plains and Midwest, as rolling corn planters could diminish some of the possibility of increased soybean acres due to the late arrival of spring. However, there were reports from the Midwest that planters have initially been filled with soybeans rather than corn, an interesting change from the past. Though still at a neutral level of carry (5 1/2 cents) the November-to-January futures spread is trending down, reflecting an increasingly bearish view of new-crop fundamentals.
WHEAT Winter wheat markets were under pressure again early Tuesday morning, with the leader still new-crop July Kansas City. Its daily chart shows another breakdown to $4.97 3/4 overnight bringing the recent low of $4.94 3/4 back into play. A move below this latter mark could trigger enough selling to drag the contract back to its low of $4.75 1/2. However, daily stochastics (short-term momentum study) is nearing the oversold 20% level, possibly hinting at a slowdown in selling interest ahead. Fundamentally winter wheat markets remain a disaster, with the Kansas City July-to-September spread sitting at a 17 1/2 cent carry while the same spread in Chicago holds an 18 1/2 cent carry.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.47 | $0.03 | -$0.31 | May | $0.008 |
| Soybeans: | $9.52 | -$0.07 | -$0.69 | May | $0.009 |
| SRW Wheat: | $4.32 | $0.00 | -$0.29 | May | $0.013 |
| HRW Wheat: | $4.46 | $0.02 | -$0.38 | May | $0.011 |
| HRS Wheat: | $5.78 | -$0.11 | -$0.10 | May | $0.008 |
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.