DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was 2 cents higher, May soybeans were 2 cents higher, and July Kansas City (HRW) wheat was 3 cents higher.

CME Globex Recap:

Grain and oilseed markets were higher early Monday, nearly across the board. Only Minneapolis spring wheat refused to rally on light follow-through selling from last Friday. Outside markets were mixed with energies mostly higher, metals lower, the U.S. dollar index unchanged, and DJIA futures higher.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 65.27 points (0.3%) lower at 20,663.22. The NASDAQ Composite lost 2.61 point to 5,911.74 and the S&P 500 dipped 5.34 points (0.2%) to 2,362.72 Friday. DJIA futures were 21 points higher early Monday morning. Asian markets closed higher with Japan's Nikkei up 73.97 points (0.4%) and Hong Kong's Hang Seng gaining 149.89 points (0.6%). European markets were mostly higher Monday with London's FTSE 100 up 6.63 points, Germany's DAX rallying 47.86 (0.4%) points, and France's CAC 40 adding 1.47 points. The euro was 0.0001 lower at 1.0654 while the U.S. dollar index gained 0.02 to 100.58. June 30-year T-Bonds were 4/32 higher at 150'31 while April gold lost $2.40 to $1,244.90. Crude oil dipped $0.01 to $50.59 while Brent crude slipped $0.09 to $52.44. China's Dalian soybean futures were closed overnight while Malaysian palm oil futures were higher.

	BULL		BEAR
1)	The corn markets' recently established short-term uptrends continue to strengthen.	1)	Corn's quarterly stocks number was a bit larger than expected, implying slightly less first-half demand for 2016-2017.
2)	Spillover buying from corn and wheat could support soybeans early Monday.	2)	Similar to corn, the soybean quarterly stocks figure implies a larger ending stocks number in upcoming USDA Supply and Demand reports.
3)	Noncommercial short-covering could continue to rally winter wheat markets.	3)	Wheat ending stocks could be projected north of 1.2 bb following Friday's Quarterly Stocks report (through Q3).

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 Old-crop May and new-crop December corn contracts extended short-term uptrends on daily charts that began last Tuesday. May corn is testing minor (short-term) technical resistance near $3.66 3/4, with the next target up at $3.70 3/4. Similarly, December has already crossed resistance at $3.88 and $3.91, with the next target sitting up at $3.94. Fundamentally there isn't a lot of fresh news, though traders will take note of Monday's weekly export inspection number (for the week ending Thursday, March 30) and Monday afternoon's initial Crop Progress and Condition reports. As for last week's action, the biggest news Friday was likely the afternoon CFTC Commitments of Traders report that showed noncommercial traders holding a net-short futures position as of Tuesday, March 28. This helps explain the short-term uptrend that began the same day, as the group moved to cover some of their net short futures during Friday's end of the week, end of the month, and end of the quarter session.

SOYBEANS Spillover buying from corn and wheat overnight helped pull soybeans higher through early Monday morning. Also, Friday's sharp post-USDA reports sell-off extended existing downtrends on both daily and weekly charts for old-crop and new-crop soybeans, leaving both markets sharply oversold. This could be enough to generate short-term buying interest, though Friday's CFTC Commitments of Traders report showed noncommercial interests still holding a sizeable net-long futures position as of Tuesday, March 28. Fundamentally traders will keep an eye on weekly export inspections Monday morning (old-crop) and the initial weekly crop progress and condition numbers Monday afternoon (new-crops). There is also persistent headlines of increasing Brazilian crop production estimates for both old-crop and new-crop to contend with.

WHEAT Friday's strong rally in wheat established short-term uptrends on daily charts for both new-crop July Chicago and Kansas City contracts. Given that reduced acres have been known for months, most of the buying was likely tied to noncommercial short-covering as the week, month, and quarter all came to an end. Fundamentally there isn't much new for wheat, though traders will take note of Monday's weekly export inspection number (for the week ending Thursday, March 30) and this afternoon's initial crop condition and progress numbers. Otherwise, traders should continue to monitor weather forecasts while tracking the most recent developments of the U.S. dollar index.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.27	$0.07	-$0.38	May	$0.003
Soybeans:	$8.71	-$0.17	-$0.75	May	$0.002
SRW Wheat:	$3.85	$0.05	-$0.41	May	-$0.003
HRW Wheat:	$3.31	$0.04	-$0.90	May	$0.007
HRS Wheat:	$4.94	-$0.09	-$0.40	May	$0.004

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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