DTN Early Word Grains
Rains Don't Dampen Grains
May corn was 2 cents higher, May soybeans were 3 cents higher, and July Kansas City (HRW) wheat was 2 cents higher.
CME Globex Recap:Though morning weather maps show rains stretching from Texas to Iowa, grains were green early Tuesday. Despite struggling during day sessions, soybeans once again led way higher overnight. Some of this was likely due to a stronger global oilseed trade in general. The U.S. dollar index was stronger, putting pressure on the metals sector. On the other hand, energies were firm again early Wednesday while DJIA futures drifted lower following Tuesday's triple-digit rally.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 150.52 points (0.7%) higher at 20,701.50. The NASDAQ Composite gained 34.77 points (0.6%) to 5,875.14 and the S&P 500 rallied 16.96 points (0.7%) to 2,358.57 Tuesday. DJIA futures were 9 points lower early Wednesday morning. Asian markets were mixed with Japan's Nikkei up 14.61 points, Hong Kong's Hang Seng gained 46.16 points (0.2%), and China's Shanghai Composite fell 11.63 points (0.4%). European markets were mostly higher Wednesday with London's FTSE 100 off 1.41 points, Germany's DAX up 52.20 points (0.4%), and France's CAC 40 adding 7.53 points (0.1%). The euro was 0.0022 lower at 1.0792 while the U.S. dollar index gained 0.14 to 99.81. June 30-year T-Bonds were 1/32 lower at 150'24 while April gold lost $3.40 to $1,252.20. Crude oil added $0.30 to $48.67 while Brent crude rallied $0.38 to $51.71. Dalian soybean futures were mixed while Malaysian palm oil futures were higher overnight.
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| BULL | BEAR | ||
| 1) | Both old and new-crop corn are indicating short-term uptrends are in place. | 1) | Noncommercial selling could continue to pressure the corn market. |
| 2) | As with corn, old-crop and new-crop soybeans are now showing early stages of short-term uptrends. | 2) | Export demand for U.S. soybeans continues to see its seasonal slowdown. |
| 3) | New-crop July Chicago and Kansas City wheat contracts are also showing signs of short-term uptrends on daily charts. | 3) | Much of the U.S. winter wheat growing area is seeing rain this week |
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 COMMENTSCORN Recently established uptrends on daily charts for both old-crop May and new-crop December corn continued to strengthen overnight, by inches rather than feet. Old-crop May is testing its 4-day high of $3.59 3/4 (overnight high of $3.59 1/4) while Dec equaled its 4-day high of $3.82 3/4. The initial upside targets are $3.66 3/4 and $3.88 respectively. As mentioned in this space Tuesday, it's interesting that corn has seen a change in its minor trends ahead of Friday's end of the week, end of the month, and end of the quarter given the recent long-liquidation by noncommercial traders. Also, Friday brings with it USDA's Quarterly Stocks (old-crop) and Prospective Plantings (new-crop) reports that are expected to spike volatility.
SOYBEANS Similar to corn, old-crop and new-crop soybeans are indicating a bullish change in minor (short-term) trends on daily charts. However, soybeans have posted previous overnight rallies that failed to generate buying interest as the day session progressed. Fundamentally the market continues to be bogged down by harvest progress in South America and China turning its demand attention to newly harvested supplies. This continues to be reflected in the strong carry of the May-to-July futures spread, covering a bearish level of full commercial carry, and could limit noncommercial buying interest. Still, the U.S. futures market could see a short-term reprieve ahead of Friday's end of the week, end of the month, end of the quarter trade as well as USDA's Quarterly Stocks and Prospective Plantings reports.
WHEAT Winter wheat contracts were trading higher early Wednesday morning despite spring rain storms that have moved across much of the U.S. Southern Plains (HRW) growing area and is expected to move into the U.S. Midwest (SRW). Similar to both corn and soybeans, new-crop July Chicago and Kansas City wheat contracts have established technical signals showing their respective minor (short-term) trends have turned up on daily charts. The initial target for July Chicago is $4.51, a price that marks the 33% retracement level of the previous downtrend from $4.88 3/4 through the recent low of $4.32 3/4. July KC's initial target is up near $4.53 3/4. Fundamentally there is little change to the wheat complex, with Friday's USDA Quarterly Stocks and Prospective Plantings reports expected to add little to the conversation.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.19 | $0.02 | -$0.39 | May | -$0.001 |
| Soybeans: | $8.96 | $0.01 | -$0.76 | May | $0.003 |
| SRW Wheat: | $3.83 | $0.04 | -$0.42 | May | $0.002 |
| HRW Wheat: | $3.32 | $0.02 | -$0.92 | May | -$0.007 |
| HRS Wheat: | $4.94 | $0.02 | -$0.41 | May | -$0.002 |
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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