DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was fractionally higher, May soybeans were 3 cents higher, and July Kansas City wheat was 2 cents lower.

CME Globex Recap:

Soybeans and corn were showing small gains early Friday morning, recovering a small part of Thursday's sell-off. Wheat contracts were under pressure, led by the Kansas City market. Outside commodities were mixed with energies mostly lower, metals higher, and softs mostly higher. In that latter group, cotton continues to see strong commercial buying. The U.S. dollar index and DJIA futures were both lower overnight.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 34.72 points (0.2%) higher at 20,810.32. The NASDAQ Composite lost 25.12 points (0.4%) to 5,835.51 and the S&P 500 added 0.99 point to 2,363.81 Thursday. DJIA futures were 61 points lower early Friday morning. Asian markets were mostly lower with Japan's Nikkei down 87.92 points, Hong Kong's Hang Seng lost 149.16 points (0.6%), and China's Shanghai Composite gained 2.06 points. European markets were lower Friday with London's FTSE 100 down 45.08 points (0.6%), Germany's DAX losing 103.92 points (0.9%), and France's CAC 40 off 46.96 points (1.0%). The euro posted a small gain, adding 0.0007 to 1.0590 while the U.S. dollar index dipped 0.10 to 100.88. March 30-year T-Bonds were 10/32 higher at 152'04 while April gold gained $6.10 to $1,257.50. Crude oil slipped $0.29 to $54.16 while Brent crude fell $0.33 to $56.25. Dalian soybean futures were lower while Malaysian palm oil futures were higher overnight.

	BULL		BEAR
1)	Holiday delayed weekly export sales and shipments of corn could be bullish Friday morning.	1)	USDA's initial supply and demand table for new-crop corn (2017-2018) could show decreased marketing year-to-marketing year demand changes.
2)	USDA's initial supply and demand table for new-crop soybeans (2017-2018) is expected to show a solid year-to-year increase in demand.	2)	Soybeans could see pre-harvest weekend pressure once again.
3)	Temperatures across much of the U.S. winter wheat growing area were back below freezing Friday morning.	3)	Marketing year total export shipments of all wheat are expected to be behind the pace needed to meet USDA's February demand projection.

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 Following a lower open to the overnight session, old-crop corn was able to show fractional gains early Friday morning. All of that sounds more dramatic than it was given the May issue moved within a 1 3/4 cent range on volume of only 9,500 contracts. Light overnight buying may not last the day with May corn (and new-crop December) still showing a short-term downtrend on its daily chart. The next price target remains at $3.68 1/4, not out of the realm of possibility if pre-harvest weekend selling gains momentum. Fundamentally, old-crop corn could see another bullish set of numbers in Friday's weekly Export Sales and Shipments report. However, these figures are for the week ending Thursday, February 16 so won't likely cause much of a stir. And then there's new-crop. As mentioned above the December is also in a minor downtrend on its daily chart with a technical target of $3.89 3/4. Furthermore, USDA will release its initial supply and demand tables at Friday's session of the Outlook Forum, providing background as to why a projected 4 million acre decrease in plantings equates to only a 10-cent (per bushel) increase in average cash price. The average daily close in February for Dec corn so far (for initial insurance guaranteed price purposes) is roughly $3.97. Last year's came in at $3.86.

SOYBEANS Soybean contracts were higher early Friday, with the minor (short-term) trend in old-crop May looking to be nearing its end. May beans dipped below support at $10.21 3/4 overnight, a price that marks the 76.4% retracement level of its previous uptrend from $10.01 1/4 through the high of $10.88 1/4, before rallying. Meanwhile, daily stochastics (short-term) momentum study) has moved below the oversold level of 20%. Combined this could be signaling the contract is in position to stabilize before starting a new short-term uptrend. However, open interest spiked during Thursday's sell-off indicating much of the pressure came from new selling that could linger in the market for a while. Fundamentally, Friday's holiday delayed weekly export sales and shipment numbers (for the week ending Thursday, February 16) are expected to show a continued seasonal slowdown in export demand. As for new-crop November, short-term technical support is at $10.01, then $9.92 1/4. Its average daily close in February (for initial insurance guaranteed price purposes) so far is approximately $10.20, as compared to last year's $8.85.

WHEAT Winter wheat contracts were lower early Friday as traders take a wait and see approach to sub-freezing temperatures across parts of the U.S. Southern Plains (HRW) and Midwest (SRW) growing areas. Some of last week's spike rally was likely tied to initial forecasts of this change in temperatures, following spring like marks that coaxed much of the crop out of winter dormancy. Technically both new-crop July Chicago and Kansas City have more room t0 the upside before secondary (intermediate-term) uptrends on weekly charts have run their course. Fundamentally, traders will take a look at Friday's holiday delayed weekly export sales and shipment numbers (for the week ending Thursday, February 16) with all wheat shipments expected to still be running well behind pace to meet USDA's revised February demand projection of 1.025 bb.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.29	-$0.06	-$0.36	Mar	-$0.002
Soybeans:	$9.38	-$0.11	-$0.74	Mar	$0.001
SRW Wheat:	$4.02	-$0.03	-$0.36	Mar	$0.005
HRW Wheat:	$3.67	$0.00	-$0.91	Mar	$0.001
HRS Wheat:	$5.11	$0.02	-$0.42	May	$0.006

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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