DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally lower, March soybeans were 6 cents lower, and March Chicago wheat was 1 cent lower.

CME Globex Recap:

Soybeans have been a wild ride so far in 2017, with the roller-coaster going down overnight. Corn and wheat continue to follow, though to a smaller degree. Outside markets were mixed with softs mostly lower, metals higher, and energies mixed. DJIA futures were higher again as the quest for 20,000 began again Wednesday. The U.S. dollar index remains under pressure despite the latest Federal Reserve minutes indicating a series of rate increases to come.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 60.42 points (0.3%) higher at 19,942.16. The NASDAQ Composite rallied 47.92 points (0.9%) to 5,477.00 and the S&P 500 added 12.92 points (0.6%) to close at 2,270.75 Wednesday. DJIA futures were unchanged early Thursday morning. Asian markets were mostly higher with Japan's Nikkei down 73.47 points (0.4%), Hong Kong's Hang Seng gained 322.22 points (1.5%), and China's Shanghai Composite rallied 6.62 points (0.2%). European markets were also mostly higher Thursday with London's FTSE 100 adding 0.13 point, Germany's DAX off 9.23 points (0.1%), and France's CAC 40 off 0.75 point. The U.S. dollar index was 0.10 lower at 102.42 while the euro was unchanged at 1.0490. March 30-year T-Bonds were down 4/32 at 150'18 while February gold gained $6.00 to $1,171.30. Crude oil added $0.17 to $53.43 while Brent crude was $0.18 higher at $56.64. Dalian soybean futures were higher while Malaysian palm oil futures were lower again overnight.

	BULL		BEAR
1)	The uptrend in cash corn (DTN National Corn Index) continues to strengthen.	1)	Cash corn has moved into an overbought situation, possibly limiting continued buying for now.
2)	National average soybean basis held steady Wednesday evening, despite the 20-cent rally in old-crop futures.	2)	Wednesday's strong rally in soybeans could lead to light selling interest Thursday.
3)	Commercial buying continues to be seen in Chicago SRW wheat.	3)	National average basis for HRW wheat remains incredibly weak, and could limit overall buying interest.

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 The corn market gave back a small part of Wednesday's rally overnight into early Thursday morning. However, the sideways trends for both old-crop March and new-crop December seem to be on the upswing meaning a possible test of the high-side of ranges at $3.67 and $3.95 respectively. The DTN National Corn Index (national average cash price) was calculated at $3.24 Wednesday evening, climbing into its target range between $3.23 and $3.29. Fundamentally it's the same old song-and-dance for corn with strong demand searching for tightly held cash supplies. Speaking of demand, weekly export sales and shipment numbers (for the week ending Thursday, December 29) are delayed until Friday morning due to this past Monday's holiday.

SOYBEANS Soybeans remain a full-blown weather market due to conditions in South America. Much of Wednesday's rally was tied to reports of flooding in Argentina, only a matter of days (seemingly) that the concern was drought. This led to a 20-cent rally in old-crop futures, before giving back about a third of its gains overnight. For the week the market remains on the plus-side of last Friday's close. Demand remains strong for U.S. soybeans, with national average basis holding steady following Wednesday's rally. This could be considered a bullish sign, at least short-term. As for new-crop, new-crop November continues to hold above its 4-week low of $9.80 3/4, sparking a rally back to near $10.00. Delivery of 500 contracts was reported against the January soybean contract, putting the total at 1,100 contracts. Another 395 contracts were reported delivered against Jan bean oil, putting its total to 3,607 contracts. Jan soybean meal reportedly had 96 contracts delivered, upping its total to 418 contracts.

WHEAT Winter wheat contracts were lower overnight, giving back a small part of Wednesday's rally. The interesting thing about the previous day's move was that, at least in Chicago SRW, it was led by commercial buying. In fact, the trend of the Chicago March-to-May futures spread remains up (weakening carry) with next resistance at 10 1/4 cents on its weekly close chart. Fundamentally there doesn't appear to be much going on to support this move, though there could be something brewing behind the headlines.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.24	$0.04	-$0.36	Mar	$0.000
Soybeans:	$9.43	$0.20	-$0.72	Mar	-$0.004
SRW Wheat:	$3.78	$0.13	-$0.40	Mar	$0.006
HRW Wheat:	$3.29	$0.12	-$0.98	Mar	-$0.007
HRS Wheat:	$5.10	$0.07	-$0.35	Mar	-$0.002

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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