DTN Early Word Grains

Grains Stay Green, Mostly

6:00 a.m. CME Globex:

July corn was fractionally lower, July soybeans were 7 cents higher, and July Kansas City (HRW) wheat was 6 cents higher.

CME Globex Recap:

Soybeans and wheat were higher again overnight into early Tuesday morning while corn showed fractional losses. The soy complex had actually taken the baton from the wheat complex, at least for a few hours, supported by what looked to be continued noncommercial buying. Outside markets were also mostly higher with softs, metals, and energies all showing gains for the most part. The U.S. dollar index and DJIA futures were slightly lower.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 27.05 points (0.1%) lower at 20,913.46. The NASDAQ Composite gained 44.00 points to 6,091.60 and the S&P 500 added 4.13 points (0.2%) to 2,388.33 Monday. DJIA futures were 5 points lower early Tuesday morning. Asian markets closed mostly higher with Japan's Nikkei up 135.18 points (0.7%), Hong Kong's Hang Seng gained 81.00 points (0.3%), and China's Shanghai Composite dropped 10.95 points (0.4%). European markets were trading higher Tuesday with London's FTSE 100 up 40.55 points (0.6%), Germany's DAX adding 16.68 points (0.1%), and France's CAC 40 gaining 19.16 points (0.4%). The euro was 0.0017 higher at 1.0917 while the U.S. dollar index dipped 0.09 to 99.04. June 30-year T-Bonds were 4/32 lower at 151'28 while June gold gained $0.80 to $1,256.30. Crude oil was $0.23 higher at $49.07 while Brent crude added $0.40 to $51.92. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.

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BULL BEAR
1) Noncommercial short-covering could continue to support the corn market. 1) Weekly export inspections of corn are showing a contra-seasonal slowdown.
2) Another solid weekly export inspections number was seen in soybeans Monday. 2) The possibility of delayed corn planting due to flooding in the U.S. Plains and Midwest could start pressure new-crop soybeans again.
3) July Kansas City wheat could continue to see strong buying from both commercial and noncommercial traders. 3) The most bearish news for wheat remains cumbersome global supplies and the relatively strong U.S. dollar.

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 contracts, both old-crop and new-crop, were fractionally lower early Tuesday morning. Old-crop July remains in a short-term sideways trend on its daily chart after testing its previous peak of $3.79 1/2 during Monday's rally. Based on retracement levels its next targets would be $3.81 and $3.86, the 61.8% and 76.4% marks of the previous short-term downtrend from $3.93 3/4 through recent low of $3.60 3/4. Monday's weekly export inspection number of 43.1 mb (for the week ending Thursday, April 27) actually dropped total inspections to 59% ahead of last year's pace from the previous week's 62%. USDA continues to project a 17% marketing year-to-marketing year increase. As for new-crop December, it equaled its previous high of $3.95 3/4 during Monday's rally. It's next upside targets are $3.98 and the February 28 high of $4.04. Traders will continue to watch weather maps, though these are unlikely to cause as much volume as was seen Monday. Delivery of another 730 contracts was reported against the May issue, putting the total at 2,766 contracts.

SOYBEANS Secondary (intermediate-term) uptrends on weekly charts for both old-crop July and new-crop November soybeans continues to strengthen, with both contracts already posting new 4-week highs. July's initial target is $9.81 3/4, then a stretch up to $10.06 3/4. November has already cleared initial resistance at $9.65 1/2 and could now make its wat to $9.80 1/4 or $9.92 1/4. Fundamentally the story remains solid demand for old-crop, with Monday's weekly export inspection number of 19.2 mb increasing total inspections lead over last year to 15%. In its April round of supply and demand data, USDA left its projection at a 5% marketing year-to-marketing year increase. The key to old-crop could be the July-to-August futures spread that is showing a far more bullish commercial outlook than the previous May-to-July. New-crop November looks comfortable following old-crop for the time being. Delivery of another 861 contracts was reported against the May issue, putting the total at 2,889 contracts.

WHEAT The wheat complex traded higher again overnight, still being led by new-crop July Kansas City (HRW). Technically the contract has cleared all but the 76.4% retracement level of its previous short-term downtrend at $4.77 3/4, with only the previous high of $4.98 1/4 beyond that. However, daily stochastics are nearing the overbought level of 80%, and indicator that could be offset by strong commercial buying if there is real concern over how much damage was done to the crop in Kansas this past weekend. New-crop Chicago (SRW) July continues to follow Kansas City, also clearing numerous resistance levels in a single bound Monday. Its next target sits near $4.64 3/4. Delivery of another 349 contracts was reported against the May Chicago issue putting its total at 1,249 contracts. Delivery of another 742 contracts was reported against the May Kansas City issue putting its total at 1,718 contracts.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.37 $0.12 -$0.41 Jul $0.009
Soybeans: $8.95 $0.17 -$0.75 Jul $0.027
SRW Wheat: $4.09 $0.25 -$0.47 Jul $0.013
HRW Wheat: $3.75 $0.33 -$0.91 Jul $0.044
HRS Wheat: $5.21 $0.12 -$0.42 Jul $0.036

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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