DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

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

CME Globex Recap:

Once again overnight trade saw the bulk of the commodity sector trade in the same direction as the U.S. dollar index. After being pummeled Monday, the greenback was able to post a modest rally through early Tuesday morning, as did energies and grains. Softs were mixed while metals were lower. DJIA futures were also higher, continuing Monday's late rally that saw the big board erase most of its earlier triple-digit loss.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 45.74 points (0.2%) lower at 20,550.98. The NASDAQ Composite gained 11.64 points (0.2%) to 5,840.37 and the S&P 500 dipped 2.39 points (0.1%) to 2,341.59 Monday. DJIA futures were 15 points higher early Tuesday morning. Asian markets were mostly higher with Japan's Nikkei up 217.28 points (1.1%), Hong Kong's Hang Seng gained 152.17 points (0.6%), and China's Shanghai Composite fell 14.01 points (0.4%). European markets were also mostly higher Tuesday with London's FTSE 100 gaining 5.71 points (0.1%), Germany's DAX up 74.50 points (0.6%), and France's CAC 40 adding 1.33 points. The euro was 0.0002 lower at 1.0861 while the U.S. dollar index gained 0.01 to 99.23. June 30-year T-Bonds were 3/32 lower at 151'12 while April gold lost $2.60 to $1,253.10. Crude oil added $0.41 to $48.14 while Brent crude rallied $0.38 to $51.13. Dalian soybean futures were lower again while Malaysian palm oil futures rallied overnight.

	BULL		BEAR
1)	Both old and new-crop corn are indicating short-term downtrends are coming to an end.	1)	Noncommercial selling could continue to pressure the corn market.
2)	Old-crop May soybeans continue to hold above key technical support on its weekly chart.	2)	Export demand for U.S. soybeans continues to see its seasonal slowdown.
3)	The U.S. Southern Plains HRW wheat growing area remains relatively dry.	3)	Trends on weekly charts remain down for both new-crop Chicago and Kansas City July contracts.

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 Monday's late loss trimming put both old-crop May and new-crop December corn in position to see a bullish change in their respective minor (short-term) trends on daily charts. It should be noted that both contracts held above previous lows of $3.49 1/4 and $3.47 3/4, though weekly charts for both are showing new 4-week lows indicating secondary (intermediate-term) downtrends remain in place. Fundamentally, traders know export demand continues to run ahead of USDA's projected pace, and need something new to get them excited about buying corn again. This could come in the form of Friday's Quarterly Stocks report, where the key number could be corn stocks on hand and the first-half demand it reflects. On the other hand, even if Q2 stocks show strong demand, ending stocks could still be projected larger than what USDA currently has in its supply and demand tables. More on this later in DTN's report preview.

SOYBEANS As discussed in this space Monday morning, the most bullish factor for May soybeans continues to be its ability to hold above technical support at $9.73 on its weekly chart. This price marks the 76.4% retracement level of the previous uptrend from $9.37 1/4 through the high of $10.88 1/4. Meanwhile, weekly stochastics (intermediate-term momentum study) have dipped below the oversold level of 20%, indicating the secondary (intermediate-term) downtrend could soon come to an end. It's interesting to note that such a move could coincide with the release of USDA's Quarterly Stocks report Friday, hinting at possibly a more bullish number than expected. As for exports, Monday's weekly inspection number shows demand continues to see its seasonal slowdown while marketing year totals run slightly ahead of USDA's projected pace.

WHEAT Winter wheat contracts were quietly mixed early Tuesday morning with Chicago fractionally higher and Kansas City showing a small loss. New-crop July contracts for both continue to show downtrends on weekly charts while daily studies show both to be sharply oversold. This could lead to a small rally, though there is little fundamental reason for wheat in general to get excited. Monday's weekly export inspection number resulted in a marketing year total that continues to trail USDA's projected pace with nine reporting weeks left. However, if the other grains are able to rally Tuesday wheat may decide to follow along.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.17	$0.00	-$0.39	May	$0.003
Soybeans:	$8.95	-$0.03	-$0.76	May	$0.008
SRW Wheat:	$3.79	-$0.03	-$0.42	May	$0.006
HRW Wheat:	$3.30	-$0.06	-$0.91	May	$0.004
HRS Wheat:	$4.93	-$0.02	-$0.40	May	$0.007

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

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

(KA)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.