DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:March corn was 1 cent lower, March soybeans were unchanged, and March Chicago wheat was 1 cent higher.

CME Globex Recap:Heading into the last trading day of the week, month, and year the commodity sector was mixed. Support came from continued weakness of the U.S. dollar index with pressure tied to a general lack of interest with the final three-day holiday weekend approaching. Grains were the essence of mixed with corn down 1 cent, wheat up 1 cent, and soybeans near unchanged.

OUTSIDE MARKETS: The Dow Jones Industrial Average closed 13.90 points lower at 19,819.78. The NASDAQ Composite dipped 6.47 points (0.1%) to 5,432.09 and the S&P 500 slipped 0.66 point to close at 2,249.26 Thursday. DJIA futures were 27 points higher early Friday morning. Asian markets were mostly higher with Japan's Nikkei down 30.77 points (0.2%), Hong Kong's Hang Seng was up 209.65 points (1.0%), and China's Shanghai Composite rallied 7.54 points (0.2%). European markets were mostly lower Friday with London's FTSE 100 losing 28.60 points (0.4%), Germany's DAX off 29.72 points (0.3%), and France's CAC 40 down 11.20 points (0.2%). The U.S. dollar index was 0.35 lower at 102.30. March 30-year T-Bonds were down 4/32 at 149'25 while February gold added $1.90 to $1,160.00. Crude oil added $0.04 to $53.81 while Brent crude was $0.05 lower at $56.80. Dalian soybean futures were mostly lower while Malaysian palm oil futures were higher overnight.

BULL	BEAR
1) Marketing year total sales and shipments of corn are expected to be bullish.	1) If soybeans fall again Friday, corn could follow.
2) Weekly and marketing year total sales and shipments of soybeans are expected to be bullish.	2) Futures spreads indicate commercial selling continues to grow stronger in soybeans.
3) A lower U.S. dollar index could spark light buying interest in wheat.	3) Global fundamentals remain bearish for wheat.

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

Fittingly for the last trading day of 2016, it can be said that corn was quiet again overnight. Old-crop March posted a trading range of only 1 3/4 cents on volume of 9,600 contracts while new-crop December managed the same 1 3/4-cent range with on 340 contracts changing hands. The interesting story in corn is the potential uptrend in the March-to-May spread if it can close at a carry of 6 1/2 cents or less Friday. This would turn its weekly close chart bullish, indicating commercial buying could continue to provide support into the new year (for a more in-depth discussion of why corn could be viewed as bullish looking ahead to 2017, see this week's On the Market column on DTN subscription sites). The weekly Export Sales and Shipments report (for the week ending Thursday, Dec. 22) is expected to show continued bullish marketing year totals for corn.

SOYBEANS

The last two early mornings have seen soybeans trade higher, only to finish lower when the day's closing bell rang. Friday has contracts starting off near unchanged as buying interest for the week looks to have been exhausted during Tuesday's 20-cent plus rally. Still, a lower U.S. dollar index could spark some renewed interest as the year comes to an end. It needs to be remembered this is also a Friday ahead of a summer three-day holiday weekend, with South America set to turn its calendar to the equivalent of July here in the U.S. Midwest. Often this situation leads to a pre-weekend rally based on uncertain weather forecasts, with Tuesday's session either sharply higher or lower depending on how weather actually played out. Closer to home, weekly export sales and shipment numbers (for the week ending Thursday, Dec. 22) are expected to show strong demand continues though not expected to provide much support given some of the data is two weeks outdated upon release.

WHEAT

Winter wheat contracts were mixed early Friday (Chicago higher, Kansas City lower), supported by the continued year-end sell-off in the U.S. dollar index. Also, traders could be cautious of the forecasted change in weather with another arctic blast expected to hit the U.S. Midwest (SRW) and Southern Plains (HRW) growing areas next week, with little snow cover on the crop for insulation. Still, it is called "winter wheat" meaning it's generally hearty enough to withstand cold temperatures as December turns to January. There have also been mumblings about potential Egypt interest in U.S. HRW supplies, though no sales announcements have been made official. Speaking of exports, weekly sales and shipment numbers (for the week ending Thursday, Dec. 22) are set for release Friday morning with weekly and marketing year totals expected to be benign for wheat.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.12	$0.02	-$0.37	Mar	$0.010
Soybeans:	$9.38	-$0.02	-$0.75	Mar	$0.017
SRW Wheat:	$3.61	$0.04	-$0.44	Mar	$0.010
HRW Wheat:	$3.16	$0.06	-$0.99	Mar	$0.015
HRS Wheat:	$5.00	$0.06	-$0.36	Mar	$0.016

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

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

(BAS)

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