DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was unchanged, March soybeans were 1 cent higher, and March Chicago wheat was 1 cent lower.

CME Globex Recap:

Grains were quietly mixed early Wednesday morning giving little hint as to the day's possible direction. Outside markets were mostly higher with crude oil, gold, 30-year T-bonds, and DJIA futures all higher. However, Tuesday's big loser, natural gas, was under pressure again, as was the U.S. dollar index.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 119.16 points (0.6%) higher at 19,881.76. The NASDAQ Composite rallied 45.97 points (0.9%) to 5,429.08 and the S&P 500 added 19 points (0.9%) to close at 2,257.83 Tuesday. DJIA futures were 21 points higher early Wednesday morning. Asian markets were mostly higher with Japan's Nikkei up 479.79 points (2.5%), Hong Kong's Hang Seng lost 15.93 points (0.1%), and China's Shanghai Composite rallied 22.87 points (0.7%). European markets were mostly lower Wednesday with London's FTSE 100 losing 4.45 points, Germany's DAX off 44.17 points (0.4%), and France's CAC 40 off 6.55 points (0.1%). The U.S. dollar index was 0.29 lower at 102.92 while the euro was 0.0038 higher at 1.0443. March 30-year T-Bonds were up 6/32 at 150'24 while February gold gained $5.50 to $1,167.50. Crude oil added $0.02 to $52.35 while Brent crude was $0.01 higher at $55.48. Dalian soybean futures were higher while Malaysian palm oil futures were lower overnight.

	BULL		BEAR
1)	The DTN National Corn Index remains in an uptrend, with firming basis supported by continued solid demand and tightly held supplies.	1)	Cash corn has moved into an overbought situation, possibly limiting continued buying for now.
2)	New-crop November soybeans continue to hold above technical support on weekly charts.	2)	For now, soybean traders aren't overly concerned by South American weather.
3)	The U.S. dollar index continues to pull back from Tuesday's high, possibly providing light support to the wheat complex.	3)	Winter wheat markets could see continued light pressure following Tuesday's disappointing close.

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 March corn picked up a little trade volume overnight, registering 10,700 contracts through early Wednesday morning. While the contract continues to consolidate, it also looks to be in an upswing toward the high-side of its range near $3.67. Meanwhile the DTN National Corn Index (NCI.X, national average cash price) remains in an uptrend on its weekly chart, nearing its target area between $3.23 and $3.29. Tuesday evening saw the NCI.X calculated at $3.20. The fact cash is trending up while futures trend sideways reflects the continued firming of basis as bin doors stay locked up tight while demand remains firm. As for new-crop December, the contract is also in a consolidation phase between roughly $3.75 and $3.95.

SOYBEANS Soybean contracts were showing small gains early Wednesday with both old-crop March and new-crop November up about a penny. With demand for U.S. supplies seeing its seasonal slowdown, though still running ahead of USDA's projected export demand pace, attention remains on South America's weather situation. Tuesday's session saw traders register a lack of concern coming out of the three-day weekend as old-crop touched double-digit losses during the day. However, as is often the case here in the U.S., the lower close sets the stage for a quiet turnaround day Wednesday. Traders are already eyeing weekend forecasts and beyond. Technically, though its trend remains down new-crop November continues to hold above its 4-week low of $9.80 3/4. Delivery of 500 contracts was reported against the January soybean contract, putting the total at 600 contracts. Another 727 contracts were reported delivered against Jan bean oil, putting its total to 3,212 contracts. Jan soybean meal reportedly had 150 contracts delivered, upping its total to 322 contracts.

WHEAT Winter wheat contracts were lower early Wednesday on light follow-through selling from Tuesday's disappointing close. After trading higher most of the first session of the new year, neither Chicago nor Kansas City could hold gains. And while contracts of both continue to hold above recently established new lows, neither have been able to generate sustained buying interest. Light support could come from a lower U.S. dollar index early Wednesday, though the greenback was able to move above last month's high as trading began in 2017. For now, the same bearish fundamentals continue to haunt winter wheat while no major winter threats are seen to the crop.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.20	$0.05	-$0.36	Mar	$0.008
Soybeans:	$9.23	-$0.08	-$0.72	Mar	$0.008
SRW Wheat:	$3.66	$0.01	-$0.41	Mar	$0.021
HRW Wheat:	$3.17	-$0.03	-$0.97	Mar	$0.018
HRS Wheat:	$5.03	$0.00	-$0.34	Mar	$0.008

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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