DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was 1 cent lower, May soybeans were 3 cents lower, and July Kansas City (HRW) wheat was fractionally higher.

CME Globex Recap:

After a steady-to-higher open to the overnight session, grain contracts were mostly lower early Tuesday morning. The largest loss was in soybeans as follow-through selling from Monday's bearish close was seen. Energies and metals switched places from the previous morning with the former showing small gains and the latter small losses. DJIA futures were under pressure once again while the U.S. dollar index showed a modest rally. In regards to financials, it was mentioned in these comments Monday that the Federal Reserve's two-day meeting was this week. That was incorrect. The meeting is scheduled for next Tuesday and Wednesday, March 14 and 15.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 51.37 points (0.2%) lower at 20,954.34. The Nasdaq Composite lost 21.58 points (0.4%) to 5,849.17 and the S&P 500 fell 7.81 points to 2,375.31 Monday. DJIA futures were 26 points lower early Tuesday morning. Asian markets were mostly higher with Japan's Nikkei down 34.99 points (0.2%), Hong Kong's Hang Seng gained 84.79 points (0.4%), and China's Shanghai Composite rallied 8.54 points (0.3%). European markets were mixed Tuesday with London's FTSE 100 up 5.90 points (0.1%), Germany's DAX gaining 9.52 points (0.1%), and France's CAC 40 off 15.17 points (0.3%). The euro was 0.0009 lower at 1.0574 while the U.S. dollar index gained 0.05 to 101.76. June 30-year T-Bonds were 2/32 higher at 149'04 while April gold lost $1.10 to $1,224.10. Crude oil rallied $0.20 to $53.40 while Brent crude gained $0.18 to $56.20. Dalian soybean and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	Export demand remains solid for U.S. corn.	1)	Corn remains vulnerable to increased noncommercial selling.
2)	Renewed buying in soybean meal could support the soybean market.	2)	At least one private estimate has increased its estimate for Brazilian soybean production, with FCStone coming at 109.1 million metric tons.
3)	Monday saw a windstorm blow across much of the U.S. Southern Plains and Midwest, possibly causing further damage to an already vulnerable winter wheat crop.	3)	Export demand for U.S. wheat continues to trail USDA's projected pace.

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 May corn posted another quiet session overnight, posting a 3-cent range on volume of only 5,800 contracts. The May issue finds itself slowly grinding toward short-term technical support on its daily chart of $3.75 1/2, with a possible slide all the way to back to its previous low of $3.67 1/4 looking more likely. If it happens this week, it would logically be tied to South American harvest, though the March USDA Supply and Demand report is set for release this coming Thursday morning. As discussed here Monday, corn is also vulnerable to increased noncommercial selling given the large net-long futures position reported in last Friday's CFTC Commitments of Traders report. Tuesday marks the cutoff day for the next Commitments of Traders report, sometimes opening the door to positioning.

SOYBEANS The soybean market was lower Tuesday morning on follow-through selling from Monday's bearish close. Yes, contracts closed fractionally higher to start the week, but were well off session highs at the end of the day. South American weather forecasts look a bit more favorable towards harvest, and FCStone increased its Brazilian production estimate to 109.1 mmt. USDA is currently sitting at a projection of 104 mmt. Technically, old-crop May could look to pull back to last Friday's low of $10.28 3/4 on its daily chart before finding new buying interest. However, as last Friday's CFTC Commitments of Traders report showed, noncommercial traders continue to trim their net-long futures holdings, a factor that could keep soybeans on the defensive throughout this week particularly with commercial buyers sitting on the sidelines.

WHEATNew-crop winter wheat contracts were mixed early Tuesday with Chicago (SRW) pressured by light spillover selling from the other grains. Monday's wind storm across the U.S. Southern Plains likely did more damage to a HRW wheat crop that was already coming under question for possible winterkill. Wind speeds exceeded 50 mph for much of the day, sucking moisture from an already dry part of the country. Kansas, the largest wheat-growing state, reported its weekly (Sunday to Sunday) as unchanged at 43% good to excellent and 22% poor to very poor. Of course, these numbers didn't take into account Monday's wind and may just be beginning to reflect the late February freeze on a crop that had already come out of dormancy.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.37	-$0.02	-$0.42	May	$0.005
Soybeans:	$9.57	$0.00	-$0.80	May	$0.007
SRW Wheat:	$4.12	$0.05	-$0.47	May	$0.005
HRW Wheat:	$3.78	$0.03	-$0.96	May	$0.012
HRS Wheat:	$5.00	-$0.05	-$0.42	May	$0.002

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

Follow Darin Newsom on Twitter @DarinNewsom

(BAS)

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