DTN Early Word Grains
Second Verse, Same as the First
July corn was 1 cent lower, July soybeans were fractionally higher, and July Kansas City (HRW) wheat was 3 cents lower.
CME Globex Recap:In almost a carbon copy of Monday, early Tuesday finds soybeans trading higher while corn and wheat markets are lower. Once again trade volume was light across the board on follow-through action from Monday's close. Also similar to the day before, most other commodities were trading higher, though old-crop cotton was down more than 1 cent. Crude oil and gold were both showing small gains while the U.S. dollar index was lower, again, and DJIA futures continued to rally.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 85.33 points (0.4%) higher at 20,981.94, the NASDAQ Composite gained 28.44 points (0.5%) to 6,149.67, and the S&P 500 added 11.42 points (0.5%) to 2,402.32 Monday. DJIA futures were 16 points higher early Tuesday morning. Asian markets closed mostly higher with Japan's Nikkei up 49.97 points (0.2%), Hong Kong's Hang Seng off 35.65 points (0.1%), and China's Shanghai Composite rallying 22.74 points (0.7%). European markets were trading mostly lower with London's FTSE 100 gaining 40.98 points (0.5%), Germany's DAX down 13.12 points (0.1%), and France's CAC 40 off 21.96 points (0.4%). The euro was 0.0073 higher at 1.1046 while the U.S. dollar index lost 0.34 to 98.54. June 30-year T-Bonds were 3/32 lower at 151'06 while June gold added $4.00 to $1,234.00. Crude oil was $0.21 higher at $49.06 while Brent crude rallied $0.22 to $52.04. China's Dalian soybean futures were lower while Malaysian palm oil futures were higher.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Export demand remains solid for old-crop corn. | 1) | It appears that last weekend's clear weather may have allowed corn planters to catch up. |
| 2) | Monday's weekly export inspections (for the week ending Thursday, May 11) showed demand for U.S. soybeans remains stronger than projected. | 2) | If the rest of the Chicago grain complex goes lower, soybeans don't appear willing to put up much of a fight to stay higher. |
| 3) | As wheat futures move lower, demand could grow stronger. | 3) | Winter wheat markets were hit by solid selling from both commercial and noncommercial traders Monday, action that could continue into Tuesday. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn contracts leaked lower again overnight on another round of light trade volume. Old-crop July posted a trading range of 1 1/4 cents, similar to the previous overnight session, with volume reaching only 10,600 contracts through early Tuesday morning. New-crop December had a trading range of 1 cent while only 4,400 contracts changed hands. Both continue to grind toward support at $3.60 1/2 and $3.81 on their respective weekly charts. Fundamentally there isn't much new in either market though old-crop saw a solid round of weekly export inspections (for the week ending Thursday, May 11) released Monday morning. Total marketing year inspections are running 54% ahead of last year's pace, down slightly from the previous week's 55% but well ahead of USDA's projected 17% increase. As for new-crop, the story remains the weather. Last weekend's clear skies over much of the U.S. Midwest allowed planters to catch up, though extended forecasts have put some rain back into the mix.
SOYBEANS Soybean futures were almost corn-like overnight, with old-crop July posting a 3 1/4-cent trading range on volume of only 6,800 contracts while new-crop November mustered a same 3 1/4-cent range with only 3,000 contracts changing hands. While trends on weekly charts remain up, this week's early activity has shown neither side (commercial, noncommercial) jumping in as eager buyers. This leaves both old-crop and new-crop contracts vulnerable to increased selling, particularly if corn continues to slide lower. However, demand for old-crop soybeans remains solid with Monday's weekly Export Inspections report showing marketing year totals continuing to run 16% ahead of last year's pace, and well ahead of USDA's latest 6% marketing year-to-marketing year increase. Regarding new-crop, the song's the same as it is for corn with traders switching from trading last weekend's conditions to the next round of extended forecasts.
WHEAT Winter wheat contracts fell Monday, and fell hard as Kansas City posted a double-digit loss and Chicago followed close behind. July contracts of both are now looking at testing lows of $4.16 (Chicago) and $4.11 1/4 (Kansas City), particularly if Tuesday's session sees solid selling from both commercial and noncommercial traders again. As for the health of the crop, questions remain about the wester Southern Plains growing area as a myriad of weather and disease problems continue to strike. But the general consensus, at least according to the market, is that the bulk of the crop seems to be fine as the calendar creeps closer to harvest this summer.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.29 | -$0.03 | -$0.39 | Jul | -$0.001 |
| Soybeans: | $8.95 | $0.03 | -$0.70 | Jul | $0.009 |
| SRW Wheat: | $3.84 | -$0.07 | -$0.39 | Jul | $0.025 |
| HRW Wheat: | $3.45 | -$0.10 | -$0.83 | Jul | $0.008 |
| HRS Wheat: | $4.99 | -$0.06 | -$0.41 | Jul | $0.007 |
Darin Newsom can be reached at darin.newsom@dtn.com
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