DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

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

CME Globex Recap:

As expected, soybeans were under pressure overnight into Friday morning while corn was holing near unchanged. Wheat, on the other hand, continued to rally as Kansas City HRW took its turn carrying the baton. This despite light renewed buying in the U.S. dollar index that has been beaten up the last 2 1/2 days. Outside markets were mixed with energies mostly higher, metals lower, and softs mixed. Cotton was down slightly after posting a solid week so far. DJIA futures were also lower as the Big Board looks to get a bump past 20,000 following the release of December jobs data early Friday.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 42.87 points (0.2%) lower at 19,899.29. The NASDAQ Composite gained 10.93 points (0.2%) to 5,487.94 and the S&P 500 dipped 1.75 points to close at 2,269.00 Thursday. DJIA futures were 10 points lower early Friday morning. Asian markets were mixed with Japan's Nikkei down 66.36 points (0.3%), Hong Kong's Hang Seng gained 46.32 points (0.2%), and China's Shanghai Composite fell 11.09 points (0.4%). European markets were lower Friday with London's FTSE 100 down 3.46 points, Germany's DAX off 18.35 points (0.1%), and France's CAC 40 down 22.18 points (0.4%). The U.S. dollar index was 0.23% higher at 101.63 while the euro was down 0.12% at 1.0594. March 30-year T-Bonds were up 12/32 at 152'28 while February gold lost $2.80 to $1,178.50. Crude oil rallied $0.39 to $54.15 while Brent crude was $0.43 higher at $57.32. Dalian soybean futures and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	Marketing year total export sales and shipments of corn are expected to still be running well ahead of USDA's demand projection.	1)	The DTN National Corn Index has climbed further into its targeted sell area, possibly putting pressure on the market heading into a weekend.
2)	Soybeans could see South American weather related buying headed into the weekend.	2)	The overnight session showed soybeans may want to post a sharp sell-off heading into the weekend.
3)	All of a sudden wheat trends, both futures and futures spreads, are up.	3)	Weekly export sales and shipments of wheat aren't expected to show much of anything Friday morning.

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 Corn was quiet again overnight with the old-crop March posting a 2-cent trading range while new-crop December moved only 1 3/4 cents. Both continue to move slowly toward the high-end of their respective sideways patterns near $3.67 and $3.95 respectively. However, the January USDA reports are growing larger on the horizon. Friday's session could see more of the same, with the release of holiday-delayed weekly export sales and shipment data (for the week ending Thursday, December 29) not expected to provide much direction. Yes, the numbers are expected to be bullish corn, showing a marketing year total sales running well ahead of USDA's projected pace. The numbers could also show the early stages of a seasonal switch from soybean shipments to corn. The market really needs to see increased commercial buying, as indicated by action in spreads, to be able to extend recent gains to new highs.

SOYBEANS Look for a normal weather-market weekend style trade in soybeans today, meaning a possible large move setting the stage for equal and opposite trade next Monday. Early indications are that the futures market could fall Friday, with contracts setting new overnight session lows early Friday morning. Old-crop March has erased all but 2 1/2 cents of Wednesday's strong rally, though continues to hold well above that same day's low of $9.92 3/4. New-crop November is also holding above its support near $9.81. Fundamentally, the release of holiday-delayed weekly export sales and shipment numbers (for the week ending Thursday, December 29) aren't expected to provide the market with much direction. However, marketing year totals should continue to run ahead of USDA's projected pace. Delivery of 444 contracts was reported against the January soybean contract, putting the total at 1,544 contracts. Another 438 contracts were reported delivered against Jan bean oil, putting its total to 4,045 contracts. Jan soybean meal reportedly had 158 contracts delivered, upping its total to 576 contracts.

WHEAT Winter wheat contracts were higher overnight as the complex (wheat) in general continues to gather strength. While bullish fundamentals are hard to pinpoint, both Chicago and Kansas City markets have been in the business recently of establishing bullish technical signals. Additional support this week has come from the sharp sell-off of the U.S. dollar index, spurred on by China's rebalancing of the yuan by buying its own currency and selling the greenback. The U.S. dollar could play a leading role in wheat again Friday depending on global currencies reaction to U.S. December jobs data set for release at the same time as holiday-delayed weekly export sales and shipment data (for the week ending Thursday, December 29). The latter is expected to largely be a non-event for wheat. For further discussion on the wheat market, see this week's Newsom on the Market column posted on DTN subscription sites later Friday morning.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.25	$0.02	-$0.36	Mar	$0.000
Soybeans:	$9.40	-$0.03	-$0.72	Mar	$0.000
SRW Wheat:	$3.87	$0.08	-$0.40	Mar	$0.007
HRW Wheat:	$3.37	$0.08	-$0.98	Mar	$0.003
HRS Wheat:	$5.16	$0.06	-$0.35	Mar	$0.000

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

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

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