DTN Early Word Grains
Another Mixed Market Day
July corn was fractionally lower, July soybeans were 2 cents higher, and July Kansas City (HRW) wheat was 5 cents lower.
CME Globex Recap:The commodity sector was mixed early Thursday morning with grains lower (except for oats), the oilseed complex mixed, and metals and energies mostly higher. Meanwhile the U.S. dollar weakened overnight as DJIA futures rallied.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 174.07 points (0.7%) lower at 23,924.98, the NASDAQ Composite lost 29.81 points (0.4%) to 7,030.70, and the S&P 500 dropped 19.13 points (0.7%) to 2,635.67 Wednesday. DJIA futures were 47 points higher early Thursday morning. Asian markets closed mostly lower with Japan's Nikkei 225 closed, Hong Kong's Hang Seng losing 410.51 points (1.3%), and China's Shanghai Composite up 19.68 points (0.6%). European markets were trading lower with London's FTSE 100 down 4.82 points, Germany's DAX losing 40.30 points (0.3%), and France's CAC 40 losing 16.00 points (0.3%). The euro was 0.0037 higher at 1.1986 while the U.S. dollar index dropped 0.26 to 92.45. June 30-year T-Bonds were 12/32 higher at 143'20 while June gold gained $7.10 to $1,312.70. Crude oil was $0.20 higher at $68.13 as Brent crude gained $0.04 to $73.40. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower overnight, keeping with the morning's mixed theme.
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| BULL | BEAR | ||
| 1) | Corn contracts again posted new highs during Wednesday's session. | 1) | Corn markets (cash, old-crop futures, new-crop futures) are showing overbought indicators on daily both daily and weekly charts. |
| 2) | If soybean meal is able to rally Thursday, soybeans could follow. | 2) | The July-to-August soybean futures spread is now in position to close the week below technical support, indicating a downtrend. |
| 3) | There continues to be no deliveries against the May Chicago (SRW) wheat contract, a curiously bullish development. | 3) | Weekly export shipments for all wheat are expected to be lackluster again in Thursday's report. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN The situation in corn futures was similar to 24 hours ago, when contracts had fallen back slightly from the previous day's new highs. There is little change in corn at this time with the markets (cash, old-crop futures, new-crop futures) supported by commercial buying, which then brings in new noncommercial interest as well. Stochastics (technical momentum studies) for all daily and weekly charts are indicating overbought markets, but this is going largely ignored for now. Both the old-crop July-to-September and new-crop December-to-March futures spreads are showing a carry of 7 1/2 cents, each still covering a neutral level of calculated full commercial carry. Thursday morning brings with it the release of weekly export sales and shipment data for the week ending Thursday, April 26 with marketing year sales expected to be bullish while marketing year shipments continue to gain ground on the pace needed to meet USDA's latest demand projection.
Delivery of 478 contracts was reported against the May issue, putting the total at 1,633 contracts.
SOYBEANS As discussed in this space numerous times recently, the focus of the soybean market should be on the trend of the July-to-August futures spread. Wednesday's session saw this spread close at a carry of 3 cents, just below support on its weekly close-only chart at 2 3/4 cents. While this is only early Thursday morning, a Friday finish below this previous low carry would confirm a downtrend in the spread that would suggest old-crop fundamentals could finish off the 2017-2018 marketing year growing more bearish. Thursday's weekly export sales and shipment data, for the week ending Thursday, April 26, isn't expected to change the overall picture for soybeans all that much. Total export shipments are expected to still be running behind pace to meet USDA's latest demand projection. Also key to soybean trade as Thursday progresses will be activity in soybean meal. Overnight trade saw meal contracts trading slightly lower. Delivery of 68 contracts was reported against the May issue, putting the total at 774 contracts.
WHEAT The wheat complex was lower again overnight, though selling enthusiasm seemed to be lacking. Commercial interest was indicated by the Kansas City July-to-September futures spread showing a stronger carry, though spread activity may have been skewed by low overnight volume. A number of interesting factors remain at play in U.S. wheat markets including strong carries in forward curves (Chicago and Kansas City), strong uptrends in futures (Chicago and Kansas City), an ongoing uptrend in the U.S. dollar index, lackluster exports of old-crop, no deliveries against the May Chicago wheat issue, and concern over production potential for new-crop (winter wheat, for now). Delivery of 86 contracts was reported against the May Kansas City issue, putting its total at 828 contracts. There continues to be no deliveries reported against the May Chicago issue.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.68 | $0.05 | -$0.38 | Jul | $0.000 |
| Soybeans: | $9.78 | $0.07 | -$0.75 | Jul | $0.018 |
| SRW Wheat: | $4.93 | $0.14 | -$0.36 | Jul | -$0.045 |
| HRW Wheat: | $5.01 | $0.17 | -$0.52 | Jul | $0.012 |
| HRS Wheat: | $6.10 | $0.03 | -$0.14 | Jul | -$0.047 |
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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