DTN Early Word Grains
Clockwork Red
6:00 a.m. CME Globex: March corn was 2 cents lower, March soybeans were 6 cents lower, and March Chicago wheat was 2 cents lower.
CME Globex Recap:Like clockwork, markets continue in normal weekly cycles with what was up Monday is now down and what was down is now up. Most notable is soybeans with a South American weather market elevating interest. With soybeans down, both wheat and corn were also on the defensive. Meanwhile, energies and softs were mostly higher while metals were mostly lower. Continuing the pattern, DJIA futures were showing small gains while the U.S. dollar index was unchanged.
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OUTSIDE MARKETS: The Dow Jones Industrial Average closed 76.42 points (0.4%) lower at 19,887.38. The NASDAQ Composite gained 10.72 points (0.2%) to 5,531.82 and the S&P 500 dipped 8.08 points (0.4%) to close at 2,268.90 Monday. DJIA futures were 4 points higher early Tuesday morning. Asian markets were mixed with Japan's Nikkei down 152.89 points (0.8%), Hong Kong's Hang Seng gained 186.16 points (0.8%), and China's Shanghai Composite dropped 9.56 points (0.3%). European markets were mostly higher Tuesday with London's FTSE 100 up 25.46 points (0.4%), Germany's DAX gaining 24.27 points (0.2%), and France's CAC 40 adding 4.64 points (0.1%). The U.S. dollar index was 0.01% higher at 101.85 while the euro was up 0.0016 at 1.0588. March 30-year T-Bonds were off 04/32 at 152'19 while February gold dipped $0.70 to $1,184.20. Crude oil rallied $0.36 to $52.32 while Brent crude was $0.36 higher at $55.30. Dalian soybean and Malaysian palm oil futures were both lower overnight.
| BULL | BEAR |
| 1) Solid export demand combined with tightly held supplies continues to support the corn market. | 1) Corn futures continue to trend sideways, with Tuesday's session expected to erase Monday's gains. |
| 2) Soybean contracts continue to hold above key technical price support levels. | 2) If soybean contracts dip below technical price support it could trigger increased selling interest. |
| 3) Recently established uptrends in wheat remain in place. | 3) Export demand for U.S. wheat supplies continues to slow. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN
Corn was lower early Tuesday morning following a quietly, traded overnight session. Contracts erased most of Monday's gains, maintaining its sideways trends on daily and weekly charts. Fundamentally, the market is little changed with export demand still strong and domestic cash supplies being held tight. This has helped push the DTN National Corn Index (national average cash price) into its technical price resistance range between $3.23 and $3.29, with the NCI.X calculated at $3.25 Monday evening. Thursday's USDA reports are expected to reset the table, possibly only slightly, setting the stage for at least a few days of increased activity. However, Tuesday's trade should be slow.
SOYBEANS
Soybeans remain predictable, with contracts giving back over half of Monday's solid rally, which itself erased about two-thirds of Friday's sell-off in normal wrap-around weather market weekend trade. With Tuesday's session expected to show continued light pressure, interest turns to Wednesday to see if technical damage is done to weekly charts ahead of Thursday's USDA reports. Both old-crop March and new-crop November continue to hold above technical support levels, while daily charts for both are hinting at possible minor (short-term) uptrends. Fundamentally, demand remains strong, though the seasonal slowdown in exports is being seen. Nevertheless, pre-report estimates are looking for USDA's seasonal tendency of reducing domestic soybean ending stocks to begin with Thursday's reports. Delivery of 465 contracts was reported against the January soybean contract, putting the total at 2,251 contracts. Another 329 contracts were reported delivered against January bean oil, putting its total to 4,719 contracts. January soybean meal reportedly had 198 contracts delivered, upping its total to 982 contracts.
WHEAT
Winter wheat contracts were showing small losses Tuesday morning, erasing most of Monday's gains. Despite the lower trade the trend on weekly charts for both Chicago and Kansas City is up. There is some chatter about Southern Plains weather, with this week's highs near 70, leading to a sharp drop to more temperatures by the weekend. Monday's weekly export inspection report showed demand continues to slow, though marketing year totals for all wheat continue on pace with USDA's December projection. Look for the market to remain quiet ahead of Thursday's round of government reports.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.25 | $0.02 | -$0.35 | Mar | $0.002 |
| Soybeans: | $9.34 | $0.11 | -$0.71 | Mar | $0.003 |
| SRW Wheat: | $3.86 | $0.04 | -$0.41 | Mar | -$0.004 |
| HRW Wheat: | $3.44 | $0.07 | -$0.94 | Mar | $0.016 |
| HRS Wheat: | $5.26 | $0.09 | -$0.34 | Mar | $0.018 |
Darin Newsom can be reached at darin.newsom@dtn.com
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