DTN Early Word Grains

French Kissed or Fried, Depending on the Market

6:00 a.m. CME Globex:

July corn was 2 cents higher, July soybeans were 7 cents higher, and July Kansas City (HRW) wheat was 2 cents higher.

CME Globex Recap:

First-round results of the French presidential race went to the less anti-EU Emmanuel Macron, sparking a strong rally in global equities and the euro, while putting heavy pressure on the U.S. dollar and gold. Most other commodities were trading higher, with gains seen in both the energy and grain complexes.

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OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 30.95 points (0.1%) lower at 20,547.76. The NASDAQ Composite lost 6.26 points (0.1%) to 5,910.52 and the S&P 500 dipped 7.16 points (0.3%) to 2,348.69 Friday. DJIA futures were 200 points higher early Monday morning. Asian markets closed mostly higher with Japan's Nikkei rallying 255.13 points (1.4%), Hong Kong's Hang Seng gaining 97.46 points (0.4%), and China's Shanghai Composite off 43.62 points (1.4%). European markets were trading sharply higher Monday with London's FTSE 100 up 126.00 points (1.8%), Germany's DAX gaining 344.45 points (2.9%), and France's CAC 40 rallying 219.81 points (4.3%). The euro was 0.0113 higher at 1.0839 while the U.S. dollar index was down 1.00 at 98.98. June 30-year T-Bonds were 1 5/32 lower at 153'00 while June gold lost $16.30 to $1,272.80. Crude oil was $0.51 higher at $50.13 while Brent crude added $0.52 to $52.48. China's Dalian soybean futures were mixed while Malaysian palm oil futures were closed overnight.

BULL BEAR
1) Spillover buying from soybeans could provide support to corn Monday morning. 1) Corn traders remain focused on South America's large harvests.
2) Friday's CFTC Commitments of traders report could be viewed as bullish for soybeans as noncommercial traders moved to a net-short futures position. 2) Weekly export inspections of soybeans are expected to show a continued seasonal slowdown.
3) The sharp sell-off by the U.S. dollar could spark a round of noncommercial short-covering in wheat. 3) The big picture in wheat is that there is too much supply in the world.

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 remains an uninteresting market, for now. However, old-crop July did stretch its overnight trading range to 3 cents on spillover buying interest from soybeans, extending its rally off Friday's new low (for this sell-off) of $3.60 3/4. Last week's CFTC Commitments of Traders report showed noncommercial interests increasing their net-short futures position to 36,742 contracts (as of the end of trade Tuesday, April 18). With both daily and weekly stochastics (technical momentum study) both creeping toward the oversold level of 20%, this larger net-short futures position could spark a round of short-covering buying in the near future. Last week saw national average basis firm about a penny, with the DTN National Corn Index (national average cash price) calculated at 35 cents under the close of the May contract. On the other hand, May futures closed 14 cents lower for the week meaning basis did little to support the cash market. As for new-crop, traders will keep an eye on weather maps and South American production as December futures continue to hold technical support between $3.81 and $3.73 1/2.

SOYBEANS Old-crop futures, both nearby May and more heavily traded July, were posing solid gains early Monday morning. Technically the July is showing uptrends on both its daily (short-term) and weekly (intermediate-term) charts, despite the recent move by noncommercial traders to a net-short futures position. Last Friday's CFTC Commitments of Traders report (for the week ending Tuesday, April 18) showed this group holding net-short futures of 12,673 contracts, the first time net-short since the week of March 8, 2016. It will be interesting to see how much conviction market bears hold in the face of the sharp sell-off by the U.S. dollar, and if this could bring renewed commercial buying interest back to the market. Monday's weekly export inspection number (for the week ending Thursday, April 20) should continue to show a seasonal slowdown. Last Friday saw the DTN National Soybean Index (national average cash price) calculated at $8.80, putting it 71 cents under the close of May futures. The previous week saw national average basis calculated at 73 1/2 cents under. New-crop November soybeans are also showing uptrends on daily and weekly charts with technical resistance on the latter between $9.73 3/4 and $10.01.

WHEAT Another Monday morning brings with it another round of possible freeze talk in winter wheat markets as temperatures turned frosty over parts of the U.S. Plains and Midwest growing areas this past weekend. Additional support could be tied to the lower U.S. dollar index overnight and expectations for a neutral-to-bullish weekly export inspection figure (for the week ending Thursday, April 20) later Monday morning. Still, wheat is wheat meaning its overnight rally amounted to roughly 3 cents. The few remaining bullish traders could be heartened by last Friday's CFTC Commitments of Traders report that showed noncommercial interests increasing their net-short futures position to 102,882 contracts, the largest since the week of October 4, 2016 when this same group held a net-short futures position of 113,320 contracts.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.22 $0.00 -$0.35 May $0.007
Soybeans: $8.80 $0.05 -$0.71 May $0.010
SRW Wheat: $3.66 -$0.01 -$0.39 May $0.002
HRW Wheat: $3.16 $0.03 -$0.88 May $0.009
HRS Wheat: $4.87 $0.00 -$0.39 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

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