DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was unchanged, November soybeans were 9 cents higher, and September Chicago wheat was 4 cents higher.

CME Globex Recap:

It would not be surprising if global currency traders are walking around humming the ditty from "Mary Poppins" used as the title of this piece today. Debate early Thursday is whether or not the Bank of England will lower interest rates, though as pointed out by some analysts the continued weakness of the British pound has already done some of the BOE's easing work. The U.S. dollar index was higher again overnight, putting renewed pressure on energies and metals. Grains were mostly higher, though corn was struggling to hold above unchanged.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 41.23 points higher at 18,355.00, the NASDAQ Composite gained 22.01 points to 5,159.74, and the S&P 500 rallied 6.76 points to close at 2,163.79 Wednesday. DJIA futures were 2 points higher overnight. Asian markets were higher with Japan's Nikkei up 171.78 points (1.1%) and China's Shanghai Composite rallied 3.97 points (0.1%). European markets were also higher ahead of the BOE's expected rate cut with London's FTSE 100 up 6.36 points (0.1%), Germany's DAX rallied 80.35 points (0.8%), and France's CAC 40 gained 16.32 points (0.4%). The U.S. dollar index rallied 0.091 to 95.654. Crude oil fell $0.36 to $40.47 while Brent crude was $0.55 lower at $42.55. December gold was $7.00 lower at $1,357.70. China's Dalian soybean futures were mixed while Malaysian palm oil futures were higher again overnight.

	BULL		BEAR
1)	December corn continues to hold above its recently established contract low of $3.29.	1)	Weekly export shipments are expected to be large, but still bearish, for corn.
2)	Weekly export shipments are expected to come in neutral-to-bullish for soybeans.	2)	Weather forecasts remain favorable, meaning bearish for soybean prices.
3)	Light noncommercial short-covering in wheat continued overnight through early Thursday morning.	3)	If the U.S. dollar index rallies in response to actions by the Bank of England, look for buying enthusiasm in wheat to wane.

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 December corn continues to consolidate above its contract low of $3.29, posted this past Tuesday, on light overnight traded volume of only 7,400 contracts. As discussed for quite some time, Dec corn is technically oversold on its daily (short-term), weekly (intermediate-term), and monthly (long-term) charts. However, this has not sparked sustained buying interest from either commercial or noncommercial traders. Why? Heading into the next USDA Crop Production report (set for release on Friday, August 12) national average yield estimates are lining up near 175 bpa putting production above 15 billion bushels. Meanwhile, old-crop exports continue to run behind pace needed to meet USDA's July demand projection of 1.9 bb. Speaking of which, Thursday's weekly export shipment number (for the week ending Thursday, July 28) needs to come in at 70.5 mb. This past Monday's weekly export inspection figure for the same time frame was 45.0 mb.

SOYBEANS Similar to what has been seen the last few mornings, soybeans traded higher overnight into early Thursday. However, where commercial buying has recently been providing support, Thursday morning saw a light round of noncommercial interest pull the market higher. Trade volume was moderate at 11,800 contracts for the November issues as it continues to hold above this week's low of $9.43. Though technically oversold, buyers remain tentative in soybeans due to continued favorable weather forecasts for August. On the other hand, export demand remains strong with another round of fresh sales possible following the release of the weekly export sales and shipment numbers. Traders are anticipating a neutral-to-bullish shipment figure (for the week ending Thursday, July 28) following this past Monday's export inspection number of 24.7 mb. Soybeans need to see shipments of 24.2 mb to stay on pace with USDA's July demand estimate of 1.795 bb.

WHEAT Winter wheat contracts were higher overnight, once again led by the Chicago SRW market. Noncommercial short-covering, post Tuesday's settlement (data used for CFTC's weekly Commitments of Traders report), continues to provide support. However this could be tested if the U.S. dollar index reacts bullishly to news from the BOE Thursday morning. Fundamentally the global wheat complex remains bearish, a factor that isn't expected to change even if world production is reduced in next week's August WASDE report (set for release Friday, August 12). Shorter-term, traders are expecting another round of bullish numbers in this week's Export Sales and Shipment reports (for the week ending Thursday, July 28). Monday's weekly export inspection figure for the same time frame was a solid 24.3 mb.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$2.96	$0.01	-$0.29	Sep	$0.002
Soybeans:	$9.24	$0.02	-$0.32	Nov	$0.004
SRW Wheat:	$3.76	$0.10	-$0.34	Sep	$0.006
HRW Wheat:	$3.20	$0.06	-$0.92	Sep	$0.001
HRS Wheat:	$4.40	$0.06	-$0.53	Sep	$0.003

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

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

(CZ)

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