DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 3 cents higher, November soybeans were 9 cents higher, and December Chicago wheat was 2 cents higher.

CME Globex Recap:

On International Coffee Day, it's only fitting to note that coffee futures posted a strong rally overnight. And just for this day, it can be said that the rally in coffee helped pull grain markets higher early Thursday. This despite a continued rally in the U.S. dollar index and the energy complex trading lower. Meanwhile, gold and DJIA futures were both posting small gains.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 110.94 points (0.6%) higher at 18,339.24, the NASDAQ Composite gained 12.84 points (0.2%) to 5,318.55, and the S&P 500 rallied 11.44 points (0.5%) to close at 2,171.37 Wednesday. DJIA futures were 10 points higher overnight. Asian markets were mostly higher with Japan's Nikkei up 228.31 points (1.4%) and China's Shanghai Composite gaining 10.63 points (0.4%). European markets were also mostly higher with London's FTSE 100 up 79.69 points (1.2%), Germany's DAX rallied 83.97 points (0.9%), and France's CAC 40 gained 55.61 points (1.3%). The U.S. dollar index was 0.119 higher at 95.550. Crude oil slipped $0.21 to $46.84 while Brent crude lost $0.37 to $48.32. December gold was $1.10 higher at $1,324.80. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.

	BULL		BEAR
1)	Weekly sales and shipments of corn are expected to be larger than needed to stay on pace with USDA's latest demand projection.	1)	Early harvest pressure could continue to be seen in corn.
2)	Weekly sales of soybeans are expected to be strong in Thursday's report.	2)	Using Monday's weekly export inspections as a guide, weekly shipments of soybeans are expected to come in below what is needed to stay on pace with USDA.
3)	Weekly sales and shipments of wheat are expected to be larger than needed to stay on pace with USDA's latest demand projection.	3)	The continued rally of the U.S. dollar index could limit buying interest in wheat.

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MORE COMMODITY-SPECIFIC COMMENTS

CORN December corn took a couple shots of espresso overnight, allowing it to jump to a trading range of 4 cents. Sure, that doesn't sound like much, but it's nearly double what it has been doing of late. Trade volume was still moderate at 8,600 contracts through early Thursday morning. Dec corn remains in a sideways trend on its daily and weekly charts, with the market's monthly trend also sideways. Thursday's session isn't expected to see corn break out of these patterns. Fundamentally the market has stabilized with the carry in the December-to-March futures spread holding at 9 3/4 cents. The carry in corn's forward curve as a whole remains neutral-to-bearish. Weekly export sales and shipment numbers (for the week ending Thursday, September 22) are expected to keep corn on pace with USDA's latest demand projection of 2.175 bb. Corn needs to see sales of 29.3 mb (743,500 mt) and shipments of 41.2 mb (1,046,300 mt).

SOYBEANS Soybeans acted like they were enjoying a smooth cup-o-joe overnight, calmly climbing higher on steady commercial buying. In fact, the November contract never traded lower as it posted an 11-cent trading range on moderate volume of 15,000 contracts through early Thursday morning. Maybe it's trying to forget the commercial beating it has taken this week as the carry in the market's forward curve strengthens while basis weakens. Nov beans are gamely trying to hold above its previous low of $9.37, discounting for now Tuesday's spike low of $9.34. Fundamentally the market continues to hear of yields coming in better than expected as early harvest expands. On the other hand, the market needs a shot of stronger export sales and shipment numbers to alleviate some of the concern of slowing demand. In order to stay on pace with USDA's demand projection of 1.985 bb soybeans need to see weekly sales of 21.7 mb (590,400 mt) and shipments of 38.1 mb (1,037,200 mt). This past Monday's weekly export inspection number of 14.1 mb doesn't instill a lot of confidence regarding weekly shipments (for the week ending Thursday, September 22).

WHEAT Winter wheat contracts were higher, but jittery as if having had too much coffee overnight. Still, both December Chicago and Kansas City (as well as Minneapolis HRS) are hinting at possible bullish turns on weekly charts, ahead of corn and soybeans. The interesting thing about wheat is that the complex has been able to post gains despite the continued rally of the U.S. dollar index. Fundamentally there isn't much change, though more chatter is being heard of possible weather issues for the Australian crop. As for weekly export sales and shipments, all wheat needs to see 12.3 (336,000 mt) and 17.7 mb (481,200 mt) respectively in Thursday's weekly update (for the week ending Thursday, September 22). It will be interesting to see if demand remains solid for both HRW and HRS, both running well ahead of last year's pace.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$2.88	-$0.02	-$0.41	Dec	$0.003
Soybeans:	$8.84	-$0.09	-$0.62	Nov	-$0.018
SRW Wheat:	$3.51	-$0.01	-$0.53	Dec	-$0.002
HRW Wheat:	$3.10	$0.02	-$1.11	Dec	$0.001
HRS Wheat:	$4.53	$0.06	-$0.55	Dec	$0.004

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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