DTN Early Word Grains
Soybeans Come Roaring Back
May corn was 1 cent higher, May soybeans were 10 cents higher, and July Kansas City (HRW) wheat was 4 cents higher.
CME Globex Recap:After two days of holding overnight gains through the close of the day session, soybeans posted a strong double-digit rally during the overnight session. Corn and wheat were far more subdued, each showing a gain of about 2 cents through early Wednesday. Much of the support for soybeans came from a sharply higher Malaysian palm oil and a rally in China's Dalian soybeans. Outside markets were mostly higher with energies showing gains and metals mostly lower. The U.S. dollar index was higher again, as were DJIA futures overnight.
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The Dow Jones Industrial Average closed 39.03 points (0.2%) higher at 20,689.24. The NASDAQ Composite gained 3.93 points (0.1%) to 5,898.61 and the S&P 500 added 1.32 points to 2,360.16 Tuesday. DJIA futures were 4 points higher early Wednesday morning. Asian markets closed mostly higher with Japan's Nikkei up 51.02 points (0.3%), Hong Kong's Hang Seng gaining 139.32 points (0.6%), and China's Shanghai Composite rallying 47.79 points (1.5%). European markets were also trading mostly higher Wednesday with London's FTSE 100 up 12.31 points (0.2%), Germany's DAX off 33.87 points (0.3%), and France's CAC 40 gaining 9.02 points (0.2%). The euro was 0.0009 lower at 1.0666 while the U.S. dollar index gained 0.05 to 100.54. June 30-year T-Bonds were 3/32 lower at 151'18 while June gold lost $3.60 to $1,254.80. Crude oil rallied $0.51 to $51.54 while Brent crude added $0.53 to $54.70. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.
| BULL | BEAR | ||
| 1) | The corn markets' recently established short-term uptrends continue to strengthen. | 1) | Corn seems to be dealing with the fewest bearish factors, though Brazil's two crops are expected to be large. |
| 2) | Soybean futures look to be at the beginning of a minor (short-term) uptrend. | 2) | Private estimates of Brazilian soybean production continue to climb almost every day. |
| 3) | Technically, both new-crop July Chicago and Kansas City futures contracts look ready to rejoin recently established short-term uptrends. | 3) | The stronger U.S. dollar could limit buying interest in wheat futures. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Both old-crop and new-crop corn contracts look poised to begin the final wave of their respective short-term 5-wave uptrends. Old-crop May fell to test support at $3.63 both Tuesday and overnight, while new-crop December held its support near $3.86 3/4. Some of the overnight buying was likely spillover interest from soybeans, while noncommercial traders continue to cover their recently reported net-short futures position. Fundamentally there is little fresh news, with Thursday's weekly export shipment number expected to show demand still running well ahead of USDA's March projection of a 17% marketing year-to-marketing year increase. This should put even more attention on USDA's next set of monthly Supply and Demand reports set for release Tuesday, April 11.
SOYBEANS As discussed in this space recently, old-crop soybeans were showing daily stochastics (short-term momentum indicators) nearing zero, meaning the market was sharply oversold and set for a minor trend change on its daily charts. That looks to finally be happening Wednesday as the contract rallied as much as 10 3/4 cents overnight while the July gained 11 1/4 cents at one point. New-crop November was showing similar technical indicators, also in position to establish a minor (short-term) uptrend. All this seems to fly in the face of fundamentals that are growing more bearish, with private estimates of Brazilian production increasing every day. On the other hand, new flooding in Argentina may be lower production estimates there. Regardless of fundamentals, both old-crop and new-crop soybeans are in position to see short-term gains.
WHEAT Winter wheat contracts were higher early Wednesday morning, once again led by Kansas City (HRW). Some of the buying could be tied to wild weather reported in Kansas, with a farmer there talking of severe thunderstorms with hail hitting some areas as a blizzard through another part of the state. Technically both new-crop July Kansas City and Chicago (SRW) are in minor (short-term) uptrends, looking to break free of recent highs to extend their respective moves. Spillover buying from soybeans and corn could be the catalyst for that to get done Wednesday, though it's just as likely the market spends another day consolidating.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.26 | -$0.04 | -$0.37 | May | $0.006 |
| Soybeans: | $8.62 | -$0.01 | -$0.76 | May | $0.000 |
| SRW Wheat: | $3.86 | $0.02 | -$0.41 | May | $0.023 |
| HRW Wheat: | $3.30 | $0.03 | -$0.92 | May | $0.006 |
| HRS Wheat: | $4.87 | -$0.05 | -$0.41 | May | -$0.015 |
Darin Newsom can be reached at darin.newsom@dtn.com
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