DTN Early Word Grains

Grains Mostly Lower to Start a New Week

6:00 a.m. CME Globex:

July corn was fractionally lower, July soybeans were fractionally higher, and July Kansas City (HRW) wheat was 2 cents lower.

CME Globex Recap:

Grains were mostly lower overnight as a new week of trade got under way. Soybeans spent most of the session trading modestly higher while corn slipped below unchanged and wheat was modestly lower early Monday morning. Weekend weather didn't seem to generate much enthusiasm. Outside markets (energies, metals, and softs) also showed mixed results while the U.S. dollar index showed a small rally and DJIA futures a small sell-off.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 62.11 points (0.3%) higher at 21,206.29, the NASDAQ Composite rallied 58.97 points (0.9%) to 6,305.80, and the S&P 500 gained 9.01 points (0.4%) to 2,439.07 Friday. DJIA futures were 6 points lower early Monday morning. Asian markets closed mostly lower with Japan's Nikkei down 6.46 points, Hong Kong's Hang Seng falling 61.06 points (0.2%), and China's Shanghai Composite off 13.88 points (0.5%). European markets were trading mostly lower with London's FTSE 100 down 19.75 points (0.3%), Germany's DAX closed, and France's CAC 40 losing 28.12 points (0.5%). The euro was 0.0020 lower at 1.1261 while the U.S. dollar index gained 0.12 to 96.78. September 30-year T-Bonds were 7/32 lower at 154'20 while August gold gained $3.00 to $1,283.20. Crude oil was $0.01 higher at $47.67 while Brent crude added $0.01 to $49.96. China's Dalian soybean futures were higher while Malaysian palm oil futures were mixed overnight.

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BULL BEAR
1) Weekly export inspections are expected to show corn's marketing year total continuing to run ahead of USDA's projected pace. 1) Keeping with its pattern of alternating higher and lower closes, corn is expected to finish Monday's session lower.
2) Both old-crop and new-crop soybeans are trying to confirm moves to minor (short-term) uptrends on daily charts. 2)

Commercial traders could look to sell even the slightest rally in new-crop soybeans.

3) The continued strength of Minneapolis spring wheat could provide light spillover support to Chicago and Kansas City winter wheat markets. 3) If weather forecasts come true for the U.S. Southern Plains, HRW wheat harvest should gain momentum this week putting pressure on the market.

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 Here's something you've probably read before about the corn market: Contracts, both old-crop and new-crop, were quiet overnight as they continue to show sideways trends. Old-crop July was sitting near unchanged early Monday after posting a 1 3/4-cent trading range on volume of 16,700 contracts while December showed a 1/4-cent gain in a similar range on volume of 5,300 contracts. Monday's session could see traders get more excited, but unlikely to duplicate last Tuesday's (recall Monday was a holiday) sell-off of 6 3/4 cents. Weekly export inspections, set for release late morning, are expected to show marketing year totals still running ahead of USDA's May projected pace, with its June estimate coming out at the end of the week. Monday afternoon brings with it the next round of NASS' crop condition guesses that could set the tone for overnight trade into Tuesday morning.

SOYBEANS Soybean contracts were showing small gains overnight, though buying enthusiasm seemed light at best. As with new-crop corn, weekend weather didn't seem to be a huge factor with November soybeans posting a 2-cent rally on trade volume of 4,600 contracts. Technically Nov beans look to be making an attempt at establishing a minor (short-term) uptrend on its daily chart, needing a move to a new 4-day high beyond $9.31 1/2 to confirm a bullish crossover by daily stochastics last Friday. Nov beans posted an overnight high of $9.30 1/4. As for old-crop, traders will keep an eye on Monday morning's weekly export inspections, with marketing year totals expected to still be running ahead of USDA's projected pace. Technically old-crop is showing a similar pattern to new-crop, with July looking to set a new 4-day high beyond $9.28 1/2 to confirm a move to a minor uptrend.

WHEAT Winter wheat contracts were showing small losses early Monday morning with most at or near overnight session lows. DTN's early weather forecast is calling for light rains over parts of the Ohio Valley, possibly slowing early SRW harvest, while hot and dry conditions are seen for much of the U.S. Southern Plains HRW growing area. This could lead to increased commercial selling as harvest gains momentum in far southern Texas. Technical price support for the July Kansas City contract is at $4.26 1/4, then back at its low of $4.11 1/4.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.36 $0.02 -$0.37 Jul -$0.001
Soybeans: $8.55 $0.09 -$0.66 Jul $0.002
SRW Wheat: $3.97 $0.01 -$0.32 Jul $0.003
HRW Wheat: $3.57 $0.04 -$0.76 Jul $0.018
HRS Wheat: $5.42 $0.04 -$0.41 Jul -$0.010

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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