DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was fractionally lower, May soybeans were 2 cents lower, and July Kansas City (HRW) wheat was unchanged.

CME Globex Recap:

Thursday night in the Western Hemisphere, news broke of the United States launching a missile strike against a military base in Syria. The news initially rallied gold about $18, crude oil $1.20, and DJIA futures lost 140 points. Grains hardly moved. Granted, most of the other markets had calmed somewhat by early Friday morning but the lack of activity in grains reflects a lack of noncommercial interest in the sector.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 14.80 points higher at 20,662.95. The NASDAQ Composite gained 14.47 points (0.3%) to 5,878.95 and the S&P 500 added 4.54 points (0.2%) to 2,357.49 Thursday. DJIA futures were 33 points lower early Friday morning. Asian markets closed mixed with Japan's Nikkei up 67.57 points (0.4%), Hong Kong's Hang Seng down 6.42 points, and China's Shanghai Composite up 5.61 points (0.2%). European markets were trading mostly lower Friday with London's FTSE 100 adding 4.88 points (0.1%), Germany's DAX off 58.40 points (0.5%), and France's CAC 40 losing 10.94 points (0.2%). The euro was 0.0010 lower at 1.0634 while the U.S. dollar index gained 0.04 to 100.76. June 30-year T-Bonds were 7/32 higher at 151'30 while June gold gained $13.30 to $1,266.60. Crude oil was $0.64 higher at $52.34 while Brent crude added $0.58 to $55.47. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	Export demand remains strong for U.S. corn supplies.	1)	Corn's charts look to be breaking down due to a lack of buying interest.
2)	Thursday's weekly export shipment report also showed continued strength of demand for U.S. soybeans.	2)	Soybean contracts are at or below technical support on weekly charts.
3)	Export demand for U.S. wheat held firm for another week.	3)	Wheat fundamentals, as indicated by the Chicago forward curve, remain bearish.

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 Corn contracts were quietly mixed early Friday, staying within fractions of Thursday's close. May posted a trading range of 1 1/2 cents while December managed to move only 1 1/4 cents over the course of the session so far. Technically there is no change, though signs of short-term uptrends on daily charts are being threatened. Fundamentally, marketing year shipments continue to run well ahead of USDA's projected pace of a 17% marketing year-to-marketing year increase. This sets the stage for USDA to make adjustments in its monthly Supply and Demand report set for release next Tuesday, though for many months it has refused to do so. For now corn continues to find buying interest, or any trade interest, as another week comes to an end.

SOYBEANS Soybean contracts were lower early Friday morning with most sitting near mid-range of the overnight session. Both old-crop May and new-crop November are oversold on their weekly charts, a technical factor that to this point has failed to generate new buying interest. Fundamentally the market is dealing with still solid export demand and a Brazilian crop that seems to be getting larger every day. The wildcard could be Argentine production, a crop that seems to be the new wheat with its nine lives. Reportedly the crop is once again vulnerable to lose 5% of its previously projected production due to flooding, at least the second time this growing and harvest seasons such a loss has been discussed. Traders could also be looking for some reaction to the meeting between President Trump and President Xi that began Thursday.

WHEAT Winter wheat contracts were fractionally mixed again early Friday morning as traders looked to take a breather following Thursday's sell-off. Both new-crop July Kansas City and Chicago are in position to test contract lows of $4.23 1/2 and $4.20 on their respective weekly charts. Fundamentally, futures spreads remain bearish despite still solid export demand numbers in weekly shipment reports. And while marketing year totals trail USDA's pace slightly, roughly 2%, demand has held together longer than previously expected. Traders could start to focus more on weekend weather maps for the U.S. Southern Plains (HRW), Midwest and Southeast (SRW) growing areas with winter wheat's growing season off and running.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.23	-$0.04	-$0.37	May	$0.003
Soybeans:	$8.66	-$0.03	-$0.75	May	$0.001
SRW Wheat:	$3.82	-$0.06	-$0.41	May	$0.008
HRW Wheat:	$3.29	-$0.05	-$0.91	May	$0.001
HRS Wheat:	$4.81	-$0.03	-$0.41	May	$0.000

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

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

(KA)

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