DTN Early Word Grains
Grains Catch Their Breath Early Thursday
July corn was 1 cent higher, July soybeans were fractionally lower, and July Kansas City (HRW) wheat was 1 cent higher.
CME Globex Recap:Grain markets were quietly mixed overnight as traders await the next headlines to drop from the U.S. administration in Washington, D.C. Wednesday's late topic of pulling out of NAFTA now appears to have been a bluff pulled against Mexico and Canada, though how much disruption it caused in grains Wednesday is difficult to calculate. Wheat was the strength of the grain complex, led by continued buying in the Minneapolis spring market. Outside commodities were also mixed with sugar trying to recover some of the previous day's losses overnight, energies continued to move lower, and gold was showing some strength.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 21.03 points (0.1%) lower at 20,975.09. The NASDAQ Composite dipped 0.27 point to 6,025.23 and the S&P 500 slipped 1.16 points to 2,387.45 Wednesday. DJIA futures were 12 points higher early Thursday morning. Asian markets closed mixed with Japan's Nikkei off 37.56 points (0.2%), Hong Kong's Hang Seng gaining 120.05 points (0.5%), and China's Shanghai Composite up 11.34 points (0.4%). European markets were trading mostly lower Thursday with London's FTSE 100 off 44.57 points (0.6%), Germany's DAX losing 35.88 points (0.3%), and France's CAC 40 down 25.20 points (0.5%). The euro was 0.0001 lower at 1.0905 while the U.S. dollar index lost 0.03 at 98.95. June 30-year T-Bonds were 2/32 higher at 152'23 while June gold added $1.30 to $1,265.50. Crude oil was $0.47 lower at $49.15 while Brent crude slipped $0.51 to $51.31. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.
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| BULL | BEAR | ||
| 1) | For now at least, the U.S. looks to not be pulling out of NAFTA after all, possibly providing light support to corn. | 1) | Corn has had a difficult time maintaining buying interest lately. |
| 2) | Weekly charts show soybean contracts, both old-crop and new-crop, continue to trend sideways-to-up. | 2) | Marketing year total shipments of soybeans could continue to be slightly lower than average (percent of final shipments) at this time of year. |
| 3) | New-crop winter wheat contracts could continue to see light noncommercial short-covering tied to recent cold weather. | 3) | Weekly export sales and shipments of wheat aren't expected to generate much buying interest. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Another early morning finds corn in the same position it has been for weeks, with both old-crop and new-crop markets trading quietly overnight while trends remains sideways. Regarding old-crop, traders could show some interest weekly export sales and shipment numbers. Stay tuned to DTN throughout the day (as always), but particularly following the release of the weekly reports for analysis about the ongoing pace of corn shipments. This remains an interesting story as the May round of USDA Supply and Demand reports draws near, and traders' attention turns to new-crop. Speaking of which, with another weekend on the horizon traders could show more interest in weather maps than they did on Wednesday. Early readings show heavy rain still in the forecasts for much of the U.S. growing area the next 7 days.
SOYBEANS Soybean contracts were unchanged (new-crop) to fractionally lower (old-crop) early Thursday morning. Similar to corn, the old-crop market will take note, but likely not be moved much, by the release of weekly export sales and shipment numbers. While attention remains on shipments, and rightfully so, the large unshipped number also needs to be watched closely as we make our way deeper into the 2016-2017 marketing year. This becomes more of an issue now that the South American harvest is all but concluded, opening the door to possible cancelations. As with corn, traders will continue to track domestic weather forecasts heading into the weekend in regards to the new-crop market.
WHEAT It's interesting to note that minor (short-term) trends for both new-crop July Chicago (SRW) and Kansas City (HRW) remain up on daily charts, with both slowly moving toward initial technical resistance. While the commercial side of both markets remains bearish, support could continue to come from noncommercial short-covering following this past weekend's dip below freezing across parts of the U.S. Southern Plains (HRW) growing area. Weekly export sales and shipments aren't expected to add much spark to the wheat complex as a whole, with total wheat shipments running on pace with USDA's April projection.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.25 | -$0.05 | -$0.42 | Jul | $0.000 |
| Soybeans: | $8.77 | -$0.08 | -$0.79 | Jul | -$0.010 |
| SRW Wheat: | $3.70 | $0.01 | -$0.56 | Jul | $0.020 |
| HRW Wheat: | $3.27 | $0.02 | -$0.98 | Jul | $0.000 |
| HRS Wheat: | $5.03 | $0.07 | -$0.48 | Jul | $0.030 |
Darin Newsom can be reached at darin.newsom@dtn.com
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