DTN Early Word Grains
More of the Same as April Nears its End
July corn was 1 cent lower, July soybeans were fractionally lower, and July Kansas City (HRW) wheat was 2 cents higher.
CME Globex Recap:Once again, grain markets were mixed early Friday morning following a quiet overnight session. Kansas City (HRW) continued to show the most strength, as far as gains go, though the complex in general showed little buying interest associated to the sell-off in the U.S. dollar. Energies and metals were mostly higher while softs were mostly lower, the latter continuing Thursday's rough session.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 6.24 points higher at 20,981.33. The NASDAQ Composite gained 23.71 points (0.4%) to 6,048.94 and the S&P 500 added 1.32 points to 2,388.77 Thursday. DJIA futures were 3 points higher early Friday morning. Asian markets closed mostly lower with Japan's Nikkei down 55.13 points (0.3%), Hong Kong's Hang Seng off 83.35 points (0.3%), and China's Shanghai Composite up 2.47 points. European markets were trading mostly higher Friday with London's FTSE 100 off 18.33 points (0.2%), Germany's DAX gaining 15.31 points (0.1%), and France's CAC 40 up 14.28 points (0.3%). The euro was 0.0067 higher at 1.0940 while the U.S. dollar index lost 0.40 at 98.76. June 30-year T-Bonds were 8/32 lower at 152'15 while June gold added $2.20 to $1,268.10. Crude oil was $0.33 higher at $49.30 while Brent crude gained $0.24 to $51.68. China's Dalian soybean and Malaysian palm oil futures were both mostly higher overnight.
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| BULL | BEAR | ||
| 1) | Export demand, through a week ago Thursday, remained strong for U.S. corn supplies. | 1) | Renewed noncommercial selling has been seen in corn since this past Tuesday's rally. |
| 2) | New-crop November soybeans could find solace in the fact the contract is near its low, possibly limiting new selling interest. | 2) | New-crop November soybeans are grinding toward its low, due in part to large supplies now available in South America. |
| 3) | Buying from both commercial and noncommercial traders tied to recent cold temperatures could continue to lift new-crop Kansas City wheat. | 3) | The most bearish news for wheat remains cumbersome global supplies and the relatively strong U.S. dollar. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Old-crop July corn found itself trading lower early Friday morning, giving back some of Thursday's gain. On its short-term daily chart, the contract continues to consolidate between last Friday's low of $3.60 3/4 and this past Tuesday's high of $3.74 3/4. Thursday's weekly export sales and shipment numbers (for the week ending Thursday, April 20) showed demand remained strong for U.S. corn, though this has done little to spark either commercial or noncommercial buying interest over the latter part of this week. Recall that the contract posted a its high Tuesday, meaning this afternoon's weekly CFTC Commitments of Traders report (for positions as of the close Tuesday) could show noncommercial interests covering some of their net-short futures holdings. As for new-crop December, it too continues to consolidate as traders watch weather maps heading into the weekend. It's possible that more rain and cool weather could lead to a round of buying ahead of Friday's close, but any interest is expected to still be limited by the fact it's only late April. May corn saw large initial delivery of 1,100 contracts.
SOYBEANS Soybean contracts were lower early Friday morning with larger losses seen in the new-crop November issue. While this could be tied to forecasts of wet weather across parts of the U.S. Midwest this weekend, it's more likely a function of large available supplies in South America as harvest there nears its end. While not expected to be tested today, technical support for the Nov contract is at its low of $9.41 1/2. Old-crop July was fractionally lower, possibly supported by the continued strong pace of export demand. Thursday's weekly export sales and shipment numbers showed total shipments finally drawing even with the 3-year average pace (percent of total shipped). Additional support for old-crop could be coming from renewed selling seen in the U.S. dollar Friday morning. Initial delivery of 1,015 contracts was reported against the May contract.
WHEAT New-crop winter wheat contracts were showing small gains early Friday morning, once again led by Kansas City (HRW). The KC market continues to be bolstered by last weekend's freeze event across parts of the U.S. Southern Plains, allowing the July contract to rally from last Friday's low of $4.11 1/4 to an overnight high of $4.38. This puts the contract in position to test resistance at $4.40, a price that marks the 33% retracement level of its previous downtrend from $4.98 1/4. Given the current read on the contract's momentum (daily stochastics), July KC wheat could make a run at the 50% retracement level of $4.54 next week. Initial delivery of 447 contracts was reported against May Chicago, and 400 contracts against May Kansas City.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.28 | $0.03 | -$0.41 | Jul | $0.006 |
| Soybeans: | $8.79 | $0.01 | -$0.79 | Jul | $0.006 |
| SRW Wheat: | $3.79 | $0.08 | -$0.53 | Jul | $0.035 |
| HRW Wheat: | $3.37 | $0.10 | -$0.97 | Jul | $0.014 |
| HRS Wheat: | $5.07 | $0.04 | -$0.46 | Jul | $0.019 |
Darin Newsom can be reached at darin.newsom@dtn.com
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