DTN Early Word Grains
Wheat Says "Hold My Beer"
July corn was 1 cent lower, July soybeans were 1 cent higher, and July Kansas City (HRW) wheat was 5 cents lower.
CME Globex Recap:Grains were mixed early Monday morning with global oilseeds mostly higher. Corn was under pressure from a better weather weekend allowing for more planting to take place. Winter wheat took that same weather and ran with much lower with it, showing solid overnight losses. Outside markers were mostly higher led by strong rallies in old-crop cotton and crude oil. Gold was also showing gains early Monday. Financials were mixed with DJIA futures higher and the U.S. dollar index lower.
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The Dow Jones Industrial Average closed 22.81 points (0.1%) lower at 20,896.61, the NASDAQ Composite gained 5.27 points (0.1%) to 6,121.23, and the S&P 500 lost 3.54 points (0.1%) to 2,390.90 Friday. DJIA futures were 19 points higher early Monday morning. Asian markets closed mostly higher with Japan's Nikkei down 14.05 points, Hong Kong's Hang Seng gaining 215.25 points (0.9%), and China's Shanghai Composite rallying 6.72 points (0.2%). European markets were trading mostly lower with London's FTSE 100 gaining 10.13 points (0.1%), Germany's DAX down 29.12 points (0.2%), and France's CAC 40 off 15.72 points (0.3%). The euro was 0.0026 higher at 1.0957 while the U.S. dollar index lost 0.24 to 98.95. June 30-year T-Bonds were 4/32 higher at 151'18 while June gold added $4.10 to $1,231.80. Crude oil was $1.32 higher at $49.16 while Brent crude rallied $1.39 to $52.23. China's Dalian soybean futures were lower while Malaysian palm oil futures were higher.
| BULL | BEAR | ||
| 1) | Both old-crop and new-crop corn contracts held technical support during a quiet overnight session. | 1) | Favorable weather and possible continued slowdown in export demand could weigh on new-crop and old-crop corn Monday. |
| 2) | Weekly export inspections are expected to be neutral-to-bullish for soybeans Monday morning. | 2) | Technically it looks like both old-crop July and new-crop November want to creep lower on short-term daily charts. |
| 3) | For now, short-term technical support continues to hold new-crop July Chicago and Kansas City contracts. | 3) | Solid commercial selling was seen in new-crop Kansas City wheat during the overnight market. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN As forecast by DTN last week, weekend weather over much of the U.S. Midwest was favorable for planting with a clear map showing for all but South Dakota early Monday morning. However, the overnight session showed little difference from mornings of unfavorable weather with new-crop December posting a 1 cent trading range on volume of only 2,000 contracts. Look for activity to pick up as Monday's session gets rolling. Technically, Dec corn continues to consolidate between trendline support at $3.87 1/4 and the recent double-top at $3.95 3/4. Overnight trade saw new-crop corn sitting at $3.87 3/4. Old-crop July is in a similar pattern between $3.69 1/2 and $3.79 1/4. The contract was holding at $3.70 1/4 early Monday, posting a trading range of 1 1/4 cents on volume of 7,800 contracts. Traders will keep an eye on weekly export inspections (for the week ending Thursday, May 11) expecting to see a continued contra-seasonal slowdown.
SOYBEANS Soybean futures, both old-crop July and new-crop November, barely avoided establishing bearish technical signals on weekly charts last week (for more information, see DTN's Technically Speaking blog later Monday morning), leading to light buying interest overnight into early Monday morning. However, the trend on daily charts remains sideways with a downward bias, meaning contracts are both leaning toward a possible test of recent lows. Overnight volume was light with July showing 7,500 contracts traded and November 2,100 contracts. Fundamentally, soybeans need to see rejuvenated commercial buying interest this coming week. Monday starts a week of demand watching with export inspections (for the week ending Thursday, May 11), with traders expecting a solid number for soybeans again.
WHEAT Winter wheat contracts took a look at the timid losses in corn and tentative technical trade in soybeans and shook its head, smirked, and said, "That's nothing. Watch this!" Contracts were posting solid losses early Monday morning as traders gauged this past weekend's weather to be beneficial for both the U.S. Midwest SRW and U.S. Southern Plains HRW crops. Technically, July Chicago is trying to hold short-term support on its daily chart at $4.26 3/4 with nothing but its contract low of $4.16 below that. July Kansas City has a bit more cushion with support between $4.32 and $4.26 1/4 before its low of $4.11 1/4 comes back into play. Fundamentally, weekly export inspections (for the week ending Thursday, May 11) are expected to come in at a neutral-to-bearish level Monday morning.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.32 | $0.02 | -$0.39 | Jul | $0.004 |
| Soybeans: | $8.92 | -$0.03 | -$0.71 | Jul | $0.004 |
| SRW Wheat: | $3.91 | -$0.01 | -$0.42 | Jul | $0.002 |
| HRW Wheat: | $3.55 | -$0.01 | -$0.84 | Jul | $0.010 |
| HRS Wheat: | $5.05 | -$0.02 | -$0.41 | Jul | -$0.003 |
Darin Newsom can be reached at darin.newsom@dtn.com
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