DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

July corn was fractionally higher, July soybeans were 4 cents lower, and July Kansas City (HRW) wheat was 6 cents lower.

CME Globex Recap:

The grain and oilseed complex was going down early Tuesday morning, with solid follow-through selling seen in soybeans. Corn, as usual, did little, while wheat came under pressure as well. Other commodity sectors were also in the red with softs, metals, and energies all showing losses. Meanwhile, the U.S. dollar index continued to firm overnight.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 148.04 points (0.6%) lower at 24,163.15, the NASDAQ Composite lost 53.53 points (0.7%) to 7,006.27, and the S&P 500 dropped 21.86 points (0.8%) to 2,648.05 Monday. DJIA futures were 48 points lower early Tuesday morning. Asian markets closed mixed with Japan's Nikkei 225 up 40.16 points (0.2%), Hong Kong's Hang Seng closed, and China's Shanghai Composite closed. European markets were trading mixed with London's FTSE 100 up 26.57 points (0.4%), Germany's DAX closed, and France's CAC 40 closed. The euro was 0.0043 lower at 1.2036 while the U.S. dollar index gained 0.37 to 92.18. June 30-year T-Bonds were 12/32 lower at 143'15 while June gold dropped $9.30 to $1,309.90. Crude oil was $0.52 lower at $68.05 as Brent crude lost $0.39 to $74.30. China's Dalian soybean and Malaysian palm oil futures were both closed overnight.

	BULL		BEAR
1)	Commercial buying continues to support corn markets.	1)	Spillover selling from soybeans and wheat could pull corn futures lower Tuesday.
2)	The carry in the July-to-August soybean spread continues to cover a bullish level of calculated full commercial carry.	2)	Follow-through selling from Monday had soybeans under pressure overnight, and is expected to continue Tuesday.
3)	Weather remains a bullish factor for winter wheat, particularly the HRW crop.	3)	The stronger U.S. dollar should put pressure on the commodity sector, including wheat.

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 Despite doing little overnight, corn still looks bullish heading into Tuesday's session. Contracts were holding firm a day after posting new highs for this move. While buying interest could be limited by spillover selling from soybeans and wheat, look for corn to hold together relatively well as the day progresses. Commercial buying continues to provide support, as evidenced by the uptick in both the old-crop July-to-September and new-crop December-to-March futures spreads. Delivery of 576 contracts was reported against the May issue, putting the total at 586 contracts.

SOYBEANS As expected following Monday's late sell-off, follow-through activity had soybeans under pressure overnight. However, sellers seemed to lose interest early Tuesday morning allowing contracts to bounce slightly off session lows. Also as was expected, the key to Monday's sell-off was increased commercial pressure, as indicated by the strengthening carry in the July-to-August futures spread. This spread will continue to be watched closely Tuesday, and if commercial selling starts to increase again, futures could look to extend losses. Delivery of 145 contracts was reported against the May issue, putting the total at 560 contracts.

WHEAT Winter wheat markets were lower early Tuesday morning, erasing much of the gains held at Monday's close. July Kansas City wheat has fallen back from its test of technical resistance near $5.44 (Monday's high was $5.43 1/4) to fall below Monday's low of $5.30 3/4. With little fresh news to provide support, it would not be surprising to see the contract continue to slide as the day progresses. Weather remains the issue across the U.S. Southern Plains, with storms (both rain and dust) expected over various parts of the growing regions Tuesday. Delivery of 159 contracts was reported against the May Kansas City issue, putting its total at 486 contracts. There continues to be no deliveries reported against the Chicago.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.63	$0.04	-$0.38	Jul	$0.013
Soybeans:	$9.72	-$0.06	-$0.77	Jul	$0.017
SRW Wheat:	$4.79	$0.15	-$0.31	Jul	$0.028
HRW Wheat:	$4.84	$0.08	-$0.53	Jul	$0.013
HRS Wheat:	$6.07	$0.11	-$0.09	Jul	$0.031

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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