DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was fractionally higher, May soybeans were 6 cents higher, and July Chicago (SRW) wheat was fractionally higher.

CME Globex Recap:

Markets were mostly higher overnight, including the grain complex. Soybeans once again led the charge as more concern is being registered over the flooding situation in Argentina. Wheat and corn were fractionally higher on spillover buying. Additional support to most commodities, metals and energies were mostly higher as well, came from the continued pressure on the U.S. dollar index. Tuesday's session saw the dollar post a solid sell-off, sparking a sharp rally in gold. DJIA futures were also higher Wednesday morning.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 6.72 points lower at 20,651.30. The NASDAQ Composite fell 14.15 points (0.2%) to 5,866.77 and the S&P 500 dipped 3.38 points (0.1%) to 2,353.78 Tuesday. DJIA futures were 10 points higher early Wednesday morning. Asian markets closed mixed with Japan's Nikkei down 192.26 points (1.0%), Hong Kong's Hang Seng up 225.04 points (0.9%), and China's Shanghai Composite off 15.14 points (0.5%). European markets were trading higher Wednesday with London's FTSE 100 rallying 21.49 points (0.3%), Germany's DAX gaining 40.12 points (0.3%), and France's CAC 40 adding 18.35 points (0.4%). The euro was unchanged at 1.0605 while the U.S. dollar index was also unchanged at 100.71. June 30-year T-Bonds were 7/32 lower at 152'24 while June gold gained $1.20 to $1,275.30. Crude oil was $0.31 higher at $53.71 while Brent crude rallied $0.40 to $56.63. China's Dalian soybean futures were higher while Malaysian palm oil futures were lower overnight.

	BULL		BEAR
1)	Corn contracts remain in short-term uptrends on daily charts.	1)	There are few bearish factors for corn at this time, though traders will monitor export business for a potential slowdown.
2)	Soybean contracts once again look to have established short-term uptrends on daily charts.	2)	Export demand for U.S. soybeans continues to see its seasonal slowdown.
3)	Both new-crop July Chicago and Kansas City wheat contracts are in short-term uptrends on their respective daily charts.	3)	Tuesday saw USDA raise its estimates for both domestic and world wheat ending stocks.

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 fractionally higher early Wednesday morning after once again posting narrow 2-cent trading ranges overnight. Both old-crop May and new-crop December remain in minor (short-term) uptrends with the next target for old-crop at $3.70 3/4 and new-crop $3.94. As for fundamentals, look for old-crop to continue to be driven by strong export demand. Traders are already looking ahead to Thursday's weekly export shipment number (for the week ending Thursday, April 6) with Monday's inspection figure of 46.1 mb hinting at marketing year total remaining bullish. In regards to new-crop, traders will continue to monitor weather forecasts for the U.S. growing areas, though it still seems a bit early for talk of potential planting delays.

SOYBEANS Soybean contracts were posting solid gains early Wednesday morning as they finally, finally, look to be establishing potential minor (short-term) uptrends. Yes, old-crop May spiked to a new low of $9.29 3/4 Tuesday, but doing its best wheat impression this may have been nothing more than a head-fake, or in the old days of pit trade a practice called "hunting stops". Tuesday's somewhat bullish close led to follow-through buying overnight that could continue into Wednesday's session. But that's where soybeans have struggled, finding daytime buying interest to match that of night traders. New-crop November is showing a similar pattern, and if it can turn a short-term corner its initial upside target would be near $9.67. Fundamentally, traders will continue to monitor headlines of flooding in Argentina. As discussed in this space Tuesday, a USDA Brazilian production estimate of 111 mmt would be a wildcard as to whether computers viewed it as bullish or bearish. For now it seems to have sparked renewed buying interest.

WHEAT Winter wheat contracts were unchanged to fractionally higher early Wednesday, supported by light spillover buying from the other grains. Technically, both new-crop July Chicago and Kansas City remain in minor (short-term) uptrends, though the former (Chicago) is already testing initial resistance on its daily chart at $4.49. If it can break through that mark, its next target is up at $4.59. July KC's initial target is $4.51 1/2, with the contract posting an overnight high of $4.44 1/4. Fundamentally, traders may keep an eye on the crop for the next week and a half following the freeze event from Tuesday morning. Much will depend on the weather over the next couple of weeks as to how much damage the crop shows.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.30	-$0.01	-$0.37	May	-$0.001
Soybeans:	$8.65	-$0.02	-$0.74	May	$0.008
SRW Wheat:	$3.93	$0.05	-$0.41	May	$0.005
HRW Wheat:	$3.39	$0.04	-$0.91	May	-$0.001
HRS Wheat:	$4.87	$0.09	-$0.40	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

(KA)

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