DTN Early Word Grains
Grains Have Moved On, Mostly Up Early Thursday
July corn was fractionally lower, July soybeans were 3 cents higher, and July Chicago (SRW) wheat was 2 cents higher.
CME Globex Recap:The grain complex was mostly higher early Thursday, with only corn giving back a small part of its post-USDA report charge. Soybeans generally erased Wednesday's loss, an interesting move in itself, with small gains also seen in bean oil and meal. Outside markets were mostly higher with solid gains seen once again in crude oil while gold worked higher. Softs were mostly higher with cotton able to rally overnight. The U.S. dollar index and DJIA futures were both lower.
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The Dow Jones Industrial Average closed 32.67 points (0.2%) lower at 20,943.11, the NASDAQ Composite added 8.56 points (0.1%) to 6,129.14, and the S&P 500 gained 2.71 points (0.1%) to 2,399.63 Wednesday. DJIA futures were 23 points lower early Thursday morning. Asian markets closed higher with Japan's Nikkei up 61.46 points (0.3%), Hong Kong's Hang Seng gaining 110.13 points (0.4%), and China's Shanghai Composite rallying 8.72 points (0.3%). European markets were trading mostly lower with London's FTSE 100 off 8.26 points (0.1%), Germany's DAX down 1.85 points, and France's CAC 40 losing 2.07 points. The euro was 0.0004 higher at 1.0873 while the U.S. dollar index dipped 0.05 to 99.58. June 30-year T-Bonds were 7/32 higher at 150'24 while June gold added $3.50 to $1,222.40. Crude oil was $0.74 higher at $48.07 while Brent crude was up $0.75 at $50.97. China's Dalian soybean futures showed small losses while Malaysian palm oil futures posted gains for the fifth consecutive night.
| BULL | BEAR | ||
| 1) | Spillover support from soybeans and wheat could support corn Thursday. | 1) | Weekly export shipments could come in slightly bearish for corn. |
| 2) | Soybean contracts, both old-crop and new-crop, posted new 4-week highs immediately following USDA's May reports. | 2) | Commercial buying in soybeans seems to come and go quickly. |
| 3) | July Chicago wheat posted a bullish short-term signal as it rallied of technical support on its daily chart Wednesday. | 3) | Wheat could start to see rolling of old-crop export sales to new-crop as its marketing year nears its end. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn was quiet, again, overnight with July posting a 1 1/4-cent trading range on volume of 11,000 contracts while new-crop December scratched out a range of 1 1/2 cents on volume of 2,400 contracts. Despite Wednesday's post-report rally, neither contract was able to break out of minor (short-term) or secondary (intermediate-term) sideways trends on their daily and weekly charts. With USDA curiously leaving export demand at 2.225 bb, traders will keep a close eye on Thursday morning's weekly export shipment number. Monday's weekly export inspections were considered bearish, and are likely to be a good indicator of a continued contra-seasonal slowdown in corn shipments. As for new-crop, another weekend is rolling around meaning traders will once again be focusing on weather forecasts. Delivery of another 486 contracts was reported against the May issue, putting the total at 6,981 contracts.
SOYBEANS Soybean contracts were higher early Thursday morning on renewed commercial buying interest. Old-crop July posted an overnight trading range of 9 cents through early Thursday morning, on decent volume of 15,600 contracts. Old-crop soybeans had one of the more interesting reactions to Wednesday's USDA reports, extending daily gains to about 14 cents within the first few seconds post-release, before commercial selling hit the market leading to a lower close. But, and this is important from a technical point of view, July and new-crop November contracts were able to post new 4-week highs on weekly charts indicating recently established secondary (intermediate-term) uptrends are gaining momentum. Fundamentally, USDA increased its projection for U.S. export demand by 25 mb to 2.050 bb, in line with what the 3-year average pace would suggest. Traders will keep a close eye on Thursday's weekly shipment update (for the week ending Thursday, May 4) for signs of continued contra-seasonal strength. There were no new deliveries reported against the May issue, leaving the total at 3,132 contracts.
WHEAT Winter wheat contracts were showing small gains early Thursday morning, with July Chicago following up Wednesday's bullish reversal off minor (short-term) technical support on its daily chart. While the wheat could struggle to find increased commercial buying, Wednesday's move could lead to at least a couple days of noncommercial short-covering. Fundamentally, it will be interest to see how weekly export shipments come in Thursday morning (for the week ending Thursday, May 4) given USDA's increased demand projection to 1.035 bb. Delivery of 13 contracts were reported against the May Chicago issue, putting its total at 1,370 contracts. Delivery of 5 contracts were reported against the May Kansas City issue putting its total at 2,194 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.34 | $0.07 | -$0.40 | Jul | -$0.003 |
| Soybeans: | $8.99 | -$0.04 | -$0.71 | Jul | -$0.001 |
| SRW Wheat: | $3.90 | $0.02 | -$0.41 | Jul | $0.001 |
| HRW Wheat: | $3.54 | $0.01 | -$0.85 | Jul | $0.001 |
| HRS Wheat: | $5.04 | $0.05 | -$0.41 | Jul | $0.007 |
Darin Newsom can be reached at darin.newsom@dtn.com
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