DTN Early Word Grains
Macron, E. and "Cheese"
July corn was 2 cents lower, July soybeans were 4 cents lower, and July Kansas City (HRW) wheat was 2 cents lower.
CME Globex Recap:While the pro-EU Emmanuel Macron smiles for the camera as the newly elected president of France, the euro has seen its pressure valve released, sending it lower early Monday morning. The U.S. dollar index is trading higher, but oddly enough, so is gold and crude oil. Grains are lower following a better weather weekend (anything was better than the previous weekend), led by continued selling in winter wheat.
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The Dow Jones Industrial Average closed 55.47 points (0.3%) higher at 21,006.94, the Nasdaq Composite added 25.42 points (o.4%) to 6,100.76, and the S&P 500 gained 9.77 points (0.4%) to 2,399.29 Friday. DJIA futures were 39 points lower early Monday morning. Asian markets closed mostly higher with Japan's Nikkei up 450 points (2.3%), Hong Kong's Hang Seng gaining 101.56 points (0.4%), and China's Shanghai Composite off 24.42 points (0.8%). European markets were trading mostly lower following Macron's victory in France with London's FTSE 100 down 2.15 points, Germany's DAX losing 38.49 points (0.3%), and France's CAC 40 off 51.29 points (0.9%). The euro was 0.0052 lower at 1.0946 while the U.S. dollar index gained 0.31 to 98.89. June 30-year T-Bonds were 19/32 higher at 152'13 while June gold gained $8.80 to $1,235.70. Crude oil was unchanged at $46.22 while Brent crude was also unchanged at $49.10. China's Dalian soybean futures were mostly higher while Malaysian palm oil futures were higher again overnight.
| BULL | BEAR | ||
| 1) | National average corn basis firmed last week. | 1) | Despite its stronger national average basis last week, weekly export inspections for corn could continue to show a contra-seasonal slowdown. |
| 2) | Old-crop soybean futures spreads and national average basis continue to indicate strong demand for U.S. supplies. | 2) | Soybeans could see increased selling interest heading into the May round of WASDE reports that is expected to show larger Brazilian production. |
| 3) | Trends in wheat remain up, despite last week's sell-off. | 3) | Both July Chicago and Kansas City wheat contracts are vulnerable to renewed selling Monday to fill price gaps left last week. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn markets, both old-crop and new-crop, were showing small losses early Monday following a quietly traded overnight session. Old-crop July posted a 3-cent trading range on volume of 10,100 contracts as it continued to consolidate within last Thursday's range from $3.76 to $3.66. Traders will keep a close eye on weekly export inspections set for release later Monday morning to see if demand for U.S. corn continues to lose ground to last year's pace. Early signs are for Monday's inspections, and this coming Thursday's weekly export shipments, to be solid again given last week's 1 1/2 stronger national average basis despite a 4 1/4 cent weekly gain by July futures. New-crop December also did little overnight, also showing a 3 1/4-cent trading range on volume of 3,200 contracts. Dec corn could stay under pressure throughout Monday's session on the idea fieldwork, in the areas not still suffering from flooding, was more active this past weekend. Delivery of another 553 contracts was reported against the May issue, putting the total at 5,204 contracts.
SOYBEANS Last Friday's session saw the inverse in the old-crop July-to-August futures spread erased, though the weak carry it's showing now still reflects the market's bullish view of supply and demand. Along that same line, national average basis firmed last week with the DTN National Soybean Index (national average cash price) gaining 5 1/2 cents on July soybeans while the latter closed 16 3/4 cents higher for the week. Both the old-crop spread and basis would imply this week's export demand numbers, starting with Monday's weekly inspections, should continue to show contra-seasonal strength. Technically, both old-crop July and new-crop November remain in uptrends on both daily and weekly charts, though vulnerable to an early round of selling this week. There were no new deliveries reported against the May issue, leaving the total at 3,132 contracts.
WHEAT Winter wheat contracts were lower early Monday morning, led by renewed commercial selling in the July contracts. From a technical point of view, both July Chicago and July Kansas City are sitting on the top end of price gaps left last week leaving both vulnerable to pressure on the idea these gaps need to be filled. Fundamentally, the weather was better this past weekend for much of the U.S. Southern Plains (HRW) and Midwest (SRW) growing areas. How much damage the crop suffered from the previous week's cold and blizzard remains to be seen. Also, though basis firmed last week, the concern is Thursday's weekly export sales number is going to show the beginning of rolling unshipped bushels from 2016-17 to the new-crop 2017-18 marketing year. Delivery of one contract was reported against the May Chicago issue, putting its total at 1,327 contracts. Delivery of another seven contracts was reported against the May Kansas City issue putting its total at 2,158 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.31 | $0.04 | -$0.40 | Jul | $0.001 |
| Soybeans: | $9.01 | $0.00 | -$0.72 | Jul | $0.014 |
| SRW Wheat: | $3.99 | $0.05 | -$0.43 | Jul | $0.000 |
| HRW Wheat: | $3.64 | $0.06 | -$0.86 | Jul | $0.004 |
| HRS Wheat: | $5.12 | $0.07 | -$0.42 | Jul | $0.006 |
Darin Newsom can be reached at darin.newsom@dtn.com
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