DTN Early Word Grains

Sssh, You'll Wake the Markets

6:00 a.m. CME Globex:

July corn was 1 cent higher, July soybeans were 1 cent lower, and July Kansas City (HRW) wheat was 1 cent higher.

CME Globex Recap:

Grain markets were relatively quiet early Wednesday, as if still snoozing following two active days to start the week. Outside markets were also acting sleepy with both energies and metals showing little life. Financials were a little more active, but not much, as both the U.S. dollar index and DJIA futures were up early.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 232.23 points (1.1%) higher at 20,996.12. The NASDAQ Composite gained 41.67 points (0.7%) to 6,025.49 and the S&P 500 added 14.46 points (0.6%) to 2,388.61 Tuesday. DJIA futures were 44 points higher early Wednesday morning. Asian markets closed higher with Japan's Nikkei rallying 210.10 points (1.1%), Hong Kong's Hang Seng gaining 122.49 points (0.5%), and China's Shanghai Composite up 6.28 points (0.2%). European markets were trading mixed Wednesday with London's FTSE 100 off 4.26 points, Germany's DAX losing 3.46 points, and France's CAC 40 gaining 4.54 points (0.1%). The euro was 0.0032 lower at 1.0894 while the U.S. dollar index gained 0.23 at 99.06. June 30-year T-Bonds were unchanged at 152'13 while June gold lost $1.30 to $1,265.90. Crude oil was $0.14 lower at $49.42 while Brent crude dipped $0.16 to $51.94. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.

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BULL BEAR
1) Daily charts for both old-crop and new-crop corn contracts indicate markets may want to go higher short-term. 1) Weekly charts remains bearish for corn.
2) Weekly charts show soybean contracts, both old-crop and new-crop, continue to trend sideways-to-up. 2) Daily charts for both old-crop and new-crop soybeans contracts show short-term uptrends are nearing their end.
3)

Winter wheat contracts posted bullish technical signals on daily charts Tuesday.

3) Buying interest in wheat could be limited because, well, its wheat, and the U.S. dollar index is higher early Wednesday morning.

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 Both old-crop July and new-crop December futures contracts look to be on the upswing of their respective minor (short-term) sideways trends. The range for July is roughly $3.60 to $3.80, with the contract closing at $3.71 3/4 Tuesday afternoon. December's range is approximately $3.78 to $3.96, with Tuesday's settlement at $3.89. Fundamentally the markets aren't much more exciting with both old-crop July-to-September and new-crop December-to-March futures spreads holding at neutral levels of full commercial carry. Traders will continue to focus on export details (e.g. new sales, shipment pace, strength and/or weakness of the U.S. dollar, etc.) while watching weather maps for new-crop.

SOYBEANS Technically, the bullish news for old-crop July soybeans is that the secondary (intermediate-term) trend on its weekly chart remains up. Kind of. The bearish news is that the minor (short-term) trend on its daily chart is slowly working toward an end with the contract trying hard to reach its initial target just short of $9.82. Fundamentals haven't helped old-crop much of late, with the May-to-July futures spread still covering a bearish level of full commercial carry and export shipments continuing to see a seasonal slowdown. A look at the same charts for new-crop November show a similar picture, though the contract has tagged its initial minor target near $9.67 over the last couple weeks.

WHEAT This past Monday morning this commentary discussed sub-freezing temperatures across parts of the U.S. Southern Plains HRW wheat growing area, then waited until Tuesday for new-crop July Kansas City and Chicago futures to react. While the Kansas City issue posted a bullish outside day (traded outside Monday's range before closing higher), the Chicago contract established a minor (short-term) bullish reversal by posting a new low before rallying above Monday's high and settling higher. In almost any other market, these technical patterns would signal at least a short-term round of noncommercial short-covering was at hand. In wheat, a complex known for giving head fakes when it comes to charts, traders may sit back and wait to see what develops over the next few days.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.30 $0.06 -$0.35 May $0.004
Soybeans: $8.85 -$0.06 -$0.70 May $0.009
SRW Wheat: $3.70 $0.06 -$0.39 May $0.000
HRW Wheat: $3.26 $0.11 -$0.86 May $0.010
HRS Wheat: $4.96 $0.11 -$0.38 May -$0.008

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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