DTN Closing Grain Comments

By Darin Newsom
DTN Senior Analyst

General Comments:

July corn was 5 3/4 cents higher at $4.02 1/4, with December 5 cents higher at $4.19 1/4. July soybeans finished 1 cent higher at $10.18 3/4, with November up 1 1/2 cents at $10.24 3/4. July Chicago wheat closed 2 1/4 cents higher at $4.93 1/2, July Kansas City was unchanged at $5.09 3/4, and July Minneapolis gained 2 1/4 cents to $6.03 3/4. June gold was $28.20 lower at $1,290.00 with July silver down $0.365 and June copper losing $0.0370. The Dow Jones Industrial Average (DJIA) dropped 254 points to 24,647. June crude oil added $0.23 to $71.19. The June distillates (heating oil) contract was $0.0001 lower, June RBOB gasoline gained $0.0051, and June natural gas lost $0.005.

Corn:

After doing next to nothing for a day and a half, corn stormed higher late in Tuesday's session. Futures spreads indicated increased commercial buying provided support, though some noncommercial interest was also evident. Both provide interesting possibilities with commercial activity hinting at new export sales to be announced in the near futures and noncommercial buying window dressing for this coming Friday's CFTC Commitments of Traders report. With each Friday's report showing positions held at the close the previous Tuesday, it's not unheard of for noncommercial traders to lure new buyers in the following week with a late increase in the previous week's position. I call it "The Angler Fish Principle" as it usually doesn't end well for those looking to buy based on CFTC reports.

Soybeans:

The soybean market was under pressure throughout Tuesday's session, with July stretching its loss to 12 1/2 cents at one point. However, spillover noncommercial buying from corn sparked a late rally, enough to pull soybeans back above unchanged for the day. Fundamentally little has changed in the market, with the July-to-August futures spread still trending down (increasing carry) on its weekly close-only chart. However, the daily chart for the July contract itself continues to hint at a possible turn to a minor (short-term) uptrend.

Wheat:

Winter wheat markets closed unchanged (Kansas City) to higher (Chicago) on late spillover buying from corn. Additional support in Chicago looks to have come from commercial buying, as indicated by the slightly weaker carry in the market's forward curve. Despite this, winter wheat remains fundamentally bearish long-term. It will be interesting to see if either, or both, markets are able to hold Tuesday's late rally past the open of the overnight session, or if sellers are waiting to jump again.

Darin Newsom can be reached at darin.newsom@dtn.com

Follow Darin Newsom on Twitter @DarinNewsom

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