DTN Early Word Grains
Follow-Through from Friday
July corn was 2 cents lower, July soybeans were 7 cents lower, and July Kansas City (HRW) wheat was 10 cents lower.
CME Globex Recap:The commodity sector in general was mixed while the grain and oilseed complex was mostly lower early Monday morning. Regarding the latter, follow-through selling from Friday's session continued to dominate trade. The U.S. dollar and Dow futures were both firm overnight, putting pressure on metals. Meanwhile, energies were mostly higher.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 332.36 points higher (1.4%) at 24,262.51, the Nasdaq Composite gained 121.47 points (1.7%) to 7,209.62, and the S&P 500 added 33.69 points (1.3%) to 2,663.42 Friday. DJIA futures were 56 points higher early Monday morning. Asian markets closed mostly higher with Japan's Nikkei 225 down 5.62 points, Hong Kong's Hang Seng up 67.76 points (0.2%), and China's Shanghai Composite gaining 45.61 points (1.5%). European markets were trading higher with London's FTSE 100 up 64.45 points (0.9%), Germany's DAX adding 53.74 points (0.4%), and France's CAC 40 up 4.11 points. The euro was 0.0033 lower at 1.1930 while the U.S. dollar index gained 0.23 to 92.80. June 30-year T-Bonds were 6/32 lower at 143'16 while June gold dropped $0.60 to $1,314.10. Crude oil was $0.68 higher at $70.40 as Brent crude rallied $0.69 to $75.56. China's Dalian soybean futures were higher and Malaysian palm oil futures were mostly lower overnight.
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| BULL | BEAR | ||
| 1) | Weekly export inspections of corn, for the week ending Thursday, May 3, are expected to be large again in Monday's report. | 1) | Corn contracts look to be rolling over into minor (short-term) downtrends. |
| 2) | July soybeans are testing minor (short-term) support on the contract's daily chart. | 2) | The old-crop July-to-August soybean spread posted a bearish close on its weekly close-only chart last Friday. |
| 3) | Fundamentally, new-crop winter wheat hasn't change with the crop's condition still not good. | 3) | New-crop winter wheat contracts now look to be in minor (short-term) downtrends on their respective daily charts. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Both old-crop July and new-crop December corn contracts look to be in the process of rolling over into minor (short-term) downtrends on their respective daily charts. If so initial support for the July is at $4.01, the 23.6% retracement level of the previous uptrend from $3.77 1/2 through last Thursday's high of $4.08 1/4. Similarly, initial support for December corn is at $4.12 1/2 following its high last Thursday of $4.22 3/4. It's interesting to note that of the two daily charts, July is showing the clearer support levels while December shows a more defined previous 5-wave uptrend. What does all that mean in the end? As the energy complex recently showed, clear short-term bearish signals can quickly be erased by strong commercial buying. This week could tell if the same thing is seen in corn. Delivery of 246 contracts was reported against the May issue, putting the total at 2,102 contracts.
SOYBEANS The old-crop July soybean contract continues to trend sideways on its daily chart, with the overnight low of $10.27 3/4 a test of support at the same price. The marks the 50% retracement level of the previous minor (short-term) uptrend from $9.65 1/4 through the high of $10.90 1/4, and also held the most recent round of selling from April 13 to April 24 that included lows of $10.29 and $10.27 3/4. If this support fails, the next level is down at the 61.8% retracement level of $10.13. It's interesting to note that the contract hit a low of $10.14 on April 6, the same day it posted a bullish outside daily range that led to the April 13 high of $10.78. New-crop November's daily chart is a bit messier, with next support near $10.24 3/4. This price held the most recent set of lows of $10.25 (April 24) and $10.25 1/4 (April 27). If it breaks this time, next support is at $10.13 3/4. Delivery of 68 contracts was reported against the May issue, putting the total at 902 contracts.
WHEAT The wheat complex was lower early Monday with winter contracts posting double-digit losses. A look at the daily chart for the Kansas City (HRW) July contract shows a classic bull trap set and sprung last week. Wheat is known for posting bullish (or bearish) technical signals before turning lower (or higher). For example, an equally impressive bear trap from March 29 that set the most recent rally in motion. Overnight trade saw the contract slip below initial support at $5.46 3/4, a price that marks the 23.6% retracement level of the previous uptrend from $4.76 1/4 through last Thursday's high of $5.68 1/2. Next support is at $5.33 1/4, then near $5.22 1/2. Delivery of 10 contracts was reported against the May Kansas City issue, putting its total at 862 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: | $3.70 | -$0.02 | -$0.36 | Jul | $0.000 |
| Soybeans: | $9.64 | -$0.16 | -$0.73 | Jul | $0.003 |
| SRW Wheat: | $4.94 | -$0.11 | -$0.33 | Jul | $0.006 |
| HRW Wheat: | $5.10 | -$0.11 | -$0.46 | Jul | $0.010 |
| HRS Wheat: | $6.11 | -$0.07 | -$0.12 | Jul | -$0.001 |
Darin Newsom can be reached at darin.newsom@dtn.com
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