DTN Early Word Grains
Just Another Day
May corn was 1 cent lower, May soybeans were 3 cents lower, and July Kansas City (HRW) wheat was 2 cents lower.
CME Globex Recap:Grain markets were lower again early Thursday morning, just like any other day so far this week. Soybeans once again led the sell-off, doing some short-term technical chart damage along the way. Corn and wheat followed, with little else to get excited about, as traders wait for the release of USDA's March Supply and Demand numbers. Outside markets were also lower with pressure seen in energies, metals, and softs. Only sugar was able to post a small rally on light commercial buying. DJIA futures were lower, hinting at continued pressure on the Big Board later in the morning, while the U.S. dollar index softened slightly.
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The Dow Jones Industrial Average closed 69.03 points (0.3%) higher at 20,855.73. The NASDAQ Composite added 3.62 points to 5,837.55 and the S&P 500 fell 5.41 points (0.2%) to 2,362.98 Wednesday. DJIA futures were 37 points lower early Thursday morning. Asian markets were mostly lower with Japan's Nikkei up 64.55 points (0.3%), Hong Kong's Hang Seng off 280.71 points (1.1%), and China's Shanghai Composite down 23.92 points (0.7%). European markets were also mostly lower Thursday with London's FTSE 100 off 54.68 points (0.8%), Germany's DAX losing 30.08 points (0.3%), and France's CAC 40 down 14.65 points (0.3%). The euro was 0.0017 higher at 1.0549 while the U.S. dollar index dipped 0.06 to 102.06. June 30-year T-Bonds were 2/32 lower at 147'27 while April gold lost $4.90 to $1,204.50. Crude oil fell another $1.11 to $49.17 while Brent crude dropped $1.11 to $52.00. Dalian soybean futures were mixed again while Malaysian palm oil futures were lower overnight.
| BULL | BEAR | ||
| 1) | Export demand remains strong for U.S. corn. | 1) | World ending stocks of corn are expected to increase in Thursday's WASDE report. |
| 2) | U.S. ending stocks of soybeans are expected to decrease slightly. | 2) | Brazil's soybean production is expected to increase in Thursday's WASDE report. |
| 3) | Weather conditions across the U.S. Southern Plains remain challenging for the HRW wheat crop. | 3) | World ending stocks of wheat are expected to increase in Thursday's WASDE report. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn contracts showed small losses overnight through early Thursday morning as both old-crop and new-crop continue to inch lower ahead of USDA's March Supply and Demand reports. Initial short-term technical support for old-crop March is near $3.68 1/4, then $3.62. The market remains vulnerable to continued noncommercial long-liquidation, particularly if little change is seen in USDA's numbers. On the other hand, it is possible corn could find renewed buying interest if USDA unveils an unexpected decrease in ending stocks. This move would likely come as a result of a larger than expected increase in total demand. Futures spreads, both old-crop and new-crop, are neutral heading into Thursday's reports. Short-term technical support for new-crop December is at $3.89 3/4, then $3.85. Delivery of another 10 contracts against the March issue was reported, putting the total at 519 contracts.
SOYBEANS May soybeans fell below its previous low of $10.17 overnight, posting a low of $10.16 1/4 and calling into question what had been a short-term 5-wave uptrend. Normally, Wave 2 (what looked to be the current wave) does not exceed the low from the previous downtrend. However, it looks to be the case this time, particularly if the May contract rallies to a higher close following the release of USDA's March Supply and Demand reports. It's a coin toss as to bullish or bearish, with U.S. ending stocks expected to decrease while Brazilian production should increase. Also, it should be noted that noncommercial traders have been liquidating a portion of their net-long futures holdings the last few weeks, possibly rattled by next week's expected interest rate rise by the Federal Reserve. Conversely, the Brazilian real remains near multi-year lows. As for new-crop November, it has dipped below short-term support at $10.07 1/4 and could now set its sights on the next target of $10.01. Delivery of another 254 contracts against the March issue was reported, putting the total at 3,385 contracts.
WHEAT Winter wheat contracts were lower early Thursday, pressured by spillover selling from the other grains. Little interest is being shown the ongoing dry, windy weather across the U.S. Southern Plains (HRW) growing area, as traders await the release of USDA's March Supply and Demand reports instead. While no major changes are expected domestically, there could be some interest in what happens to global numbers. Technically both new-crop July contracts for Chicago and Kansas City have seen their secondary (intermediate-term) trends on weekly charts turn sideways this week. Delivery of another 134 contracts against the Chicago March issue was reported, putting the total at 4,075 contracts. Kansas City March had no new deliveries reported, leaving its total at 430 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.31 | -$0.04 | -$0.41 | May | -$0.002 |
| Soybeans: | $9.42 | -$0.03 | -$0.80 | May | $0.001 |
| SRW Wheat: | $4.02 | -$0.10 | -$0.45 | May | -$0.001 |
| HRW Wheat: | $3.72 | -$0.05 | -$0.94 | May | $0.016 |
| HRS Wheat: | $4.91 | -$0.05 | -$0.43 | May | $0.001 |
Darin Newsom can be reached at darin.newsom@dtn.com
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