DTN Early Word Grains
A Much Quieter Morning
July corn was 2 cents higher, July soybeans were 1 cent higher, and July Kansas City (HRW) wheat was 6 cents higher.
CME Globex Recap:Not surprisingly, markets in general were much quieter overnight into Tuesday morning than 24 hours ago. Most notably, DJIA futures were only up 60 points rather than 200 points-plus. On the other hand, the U.S. dollar index was weaker providing new support to gold and sparking continued buying in crude oil. The grain and oilseed complex was quietly higher across the board.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 298.20 points (1.2%) higher at 25,013.29, the NASDAQ Composite gained 39.70 points (0.5%) to 7,394.04, and the S&P 500 rallied 20.04 points (0.7%) to 2,733.01 Monday. DJIA futures were 62 points higher early Tuesday morning. Asian markets closed mixed with Japan's Nikkei 225 down 42.03 points (0.2%), Hong Kong's Hang Seng closed, and China's Shanghai Composite up 0.51 point. European markets were trading mostly higher with London's FTSE 100 up 3.85 points, Germany's DAX up 2.87 points, and France's CAC 40 down 4.90 points. The 10-year Treasury yield was 3.065% with June 30-year T-Bonds 3/32 lower at 141'05. The euro was 0.0034 higher at 1.1825 as the U.S. dollar index lost 0.21 to 93.33. June gold gained $3.50 to $1,294.40 while crude oil added $0.31 to $72.55. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | December corn moved to a new high (for this uptrend) during Monday's rally. | 1) | Corn's futures spreads aren't as bullish as the sentiment of the market at this time. |
| 2) | The most bullish piece of news for soybeans looks to be the trucker strike in Brazil. | 2) | China dropping its proposed tariffs against U.S. soybean imports isn't as bullish as made out to be, since it wasn't going to apply them to begin with. |
| 3) | Weather just refuses to help the U.S. HRW wheat crop. | 3) | July Kansas City wheat remains in a minor (short-term) downtrend on its 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 The corn market continues to build bullish momentum after new-crop December posted a new high (for this move) of $4.24 3/4 during Monday's rally. With the end of the month fast approaching attention is turning to the major (long-term) trends for both corn futures and cash markets. Both major trends remain sideways-to-up with the July testing resistance at $4.04 3/4 and the DTN National Corn Index clearing its previous high of $3.57 1/4. Fundamentally the market is mostly neutral with the old-crop July-to-September spread covering a bearish level of calculated full commercial carry while new-crop December-to-March remains neutral. The December 2018 through July 2019 forward curve is neutral-to-bullish. As for Tuesday's session, it would not be surprising to see corn contracts hold overnight gains, particularly if light selling interest in soybeans fades.
SOYBEANS The most bullish news driving soybeans higher Monday was the escalating trucker strike in Brazil, particularly with the seasonal swing of China's interest to South American supplies and Argentina's diminished crop. As for China's removal of proposed tariffs against imports of U.S. soybeans, these were never going to be enforced to begin with, again due to tight Argentine supplies limiting that country's crush capability. Technically, old-crop July left an impressive bullish gap on its daily chart between Friday's high of $10.07 3/4 and Monday's low of $10.11 1/2. Monday's close near session highs should spark continued buying interest Tuesday as contracts have already erased small overnight losses. Short-term momentum now looks to be on the side of market bulls, at least until headlines change again. Fundamentally, the old-crop July-to-August spread is covering a neutral level of calculated full commercial carry while new-crop November-to-January is still bullish. In fact, the November 2018 through July 2019 forward curve remains inverted, indicating a long-term bullish view of new-crop supply and demand.
WHEAT The wheat complex was showing solid gains overnight with winter markets recovering over half of Monday's sell-off. July Kansas City is still showing a 3-wave downtrend, with Monday's high of $5.46 looking like a Wave B (second wave) peak. If so, the contract would now be expected to move below the Wave A low of $5.02 1/2 to complete the pattern. Fundamentally the news is far more bullish than futures spreads would indicate, with the HRW crop across the U.S. Southern Plains continuing to show the effects of endless adverse weather. Still, harvest will be staring soon in far southern Texas.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.69 | $0.00 | -$0.34 | Jul | $0.002 |
| Soybeans: | $9.57 | $0.27 | -$0.68 | Jul | $0.005 |
| SRW Wheat: | $4.77 | -$0.10 | -$0.31 | Jul | $0.006 |
| HRW Wheat: | $4.88 | -$0.12 | -$0.39 | Jul | $0.006 |
| HRS Wheat: | $6.10 | -$0.08 | -$0.12 | Jul | -$0.006 |
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.