DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was unchanged, May soybeans were 5 cents higher, and July Kansas City (SRW) wheat was 1 cent lower.

CME Globex Recap:

Despite lower trade in both Dalian soybeans and Malaysian palm oil, the Chicago soybean complex was able to reverse course overnight to post small gains early Wednesday morning. Meanwhile, corn continued its streak of doing nothing during the overnight session while winter wheat contracts were lower. Outside markets were also mixed with energies mostly higher and metals mostly lower. The U.S. dollar index and DJIA futures were both slightly higher.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 113.64 points (0.6%) lower at 20,523.28. The NASDAQ Composite dipped 7.32 points (0.1%) to 5,849.47 and the S&P 500 lost 6.82 points (0.3) to 2,342.19 Tuesday. DJIA futures were 31 points higher early Wednesday morning. Asian markets closed mostly lower with Japan's Nikkei up 13.61 points, Hong Kong's Hang Seng off 98.66 points (0.4%), and China's Shanghai Composite down 26.03 points (0.8%). European markets were trading mostly higher Wednesday with London's FTSE 100 off 1.73 points, Germany's DAX gaining 38.15 points (0.3%), and France's CAC 40 up 19.87 points (0.4%). The euro was 0.0008 lower at 1.0722 while the U.S. dollar index was up 0.13 at 99.63. June 30-year T-Bonds were 16/32 lower at 154'21 while June gold lost $9.60 to $1,284.50. Crude oil was $0.12 higher at $52.53 while Brent crude added $0.18 to $55.07. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

	BULL		BEAR
1)	Spillover buying interest from soybeans could provide light support to corn Wednesday.	1)	Buying interest remains light at best in corn, meaning the market could continue to grind lower.
2)	Short-term trends remain up for both old-crop and new-crop soybean futures.	2)	Large supplies of freshly harvested soybeans in Brazil continue to hang over the market's head.
3)	Since winter wheat sold off along with the U.S. dollar index Tuesday, maybe Wednesday's early rally in the latter will provide support.	3)	Realistically, a stronger U.S. dollar index should push wheat contracts lower again Wednesday.

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 In what is now a familiar refrain for the corn market, contracts were quiet overnight with most sitting at or near unchanged from Tuesday's settlement. Once again, trading ranges were less than 2 cents for both old-crop and new-crop contracts. There continues to be little fresh news to drive the market, leaving traders to watch the weather and read stories of Brazil's production, in corn as well as soybeans, grow larger. Technically, old-crop May and July are testing minor (short-term) support on daily charts while similar support for new-crop December sits between $3.84 3/4 and $3.82 1/4.

SOYBEANS After taking a couple of hard hits this week, the soybean market was able to post a quiet rebound overnight. Both old-crop May and July, as well as new-crop November, remain in uptrends on daily charts meaning buying momentum could increase as Wednesday's session progresses. Yes, export demand is in its seasonal slowdown and yes, estimates for Brazil's production are huge, but the pace of U.S. exports continues to run ahead of USDA's projections and there are some rain issues affecting late harvest in South America. This opens the door for a round of noncommercial buying, if nothing else, to provide support to soybeans.

WHEAT Winter wheat contracts were lower again early Wednesday, unable to find much buying interest during the overnight session. This week has seen new-crop July contracts for both Chicago (SRW) and Kansas City (HRW) test their previous lows, with eyes on contract lows not that far away ($4.20 and $4.23 1/2 respectively). Weather across the U.S Southern Plains (HRW), Midwest and Southeast (both SRW) has been relatively benign, bringing rains and moderate temperatures to the crops in the field. Tuesday's session was notable for winter wheat not being able to rally as the U.S. dollar index sold off, opening the door to who knows what Wednesday as the greenback trades higher.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.26	-$0.05	-$0.36	May	-$0.001
Soybeans:	$8.74	-$0.07	-$0.72	May	$0.005
SRW Wheat:	$3.82	$0.01	-$0.40	May	-$0.006
HRW Wheat:	$3.30	$0.04	-$0.90	May	$0.006
HRS Wheat:	$4.99	$0.10	-$0.41	May	-$0.006

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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