DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 1 cent higher, November soybeans were fractionally higher, and July Kansas City (HRW) wheat was 4 cents lower.

CME Globex Recap:

The summer solstice occurred late last night, meaning either Tuesday or Wednesday could be considered the longest day with a short night in between. Grains used that time to show mixed results as corn and soybeans inched higher while the wheat complex was lower. Weather remains the key issue with little rain seen again over the last 24 hours. And while forecasts continue to call for favorable conditions, heat is expected to return to parts of the U.S. Midwest Wednesday. Outside markets were mostly lower with softs and energies both under pressure. Metals were showing small gains.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 61.85 points (0.3%) lower at 21,467.14, the NASDAQ Composite lost 50.98 points (0.8%) to 6,188.03, and the S&P 500 dipped 16.43 points (0.7%) to 2,437.03 Tuesday. DJIA futures were 19 points lower early Wednesday morning. Asian markets closed mostly lower with Japan's Nikkei down 91.62 points (0.5%), Hong Kong's Hang Seng losing 148.46 points (0.6%), and China's Shanghai Composite adding 16.20 points (0.5%). European markets were trading lower with London's FTSE 100 down 23.54 points (0.3%), Germany's DAX losing 77.02 points (0.6%), and France's CAC 40 off 51.98 points (1.0%). The euro was 0.0012 higher at 1.1147 while the U.S. dollar index was 0.10 lower at 97.65. September 30-year T-Bonds were 5/32 higher at 156'18 while August gold rallied $4.20 to $1,247.70. Crude oil was $0.16 lower at $43.33 while Brent crude lost $0.23 to $45.79. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

	BULL		BEAR
1)	Another morning brings another 24 hours of little rain to the U.S. Midwest, likely providing support to corn early Wednesday morning.	1)	Extended forecasts for the U.S. Midwest still look to be bearish corn.
2)	Whispers are starting to be heard of a growing idea that USDA has once again overestimate old-crop soybean ending stocks.	2)	Tuesday's session showed just how tentative the recent rally in soybeans has been.
3)	Wheat markets remain in uptrends on weekly charts.	3)	Winter wheat harvest continues to run slightly ahead of the 5-year average pace.

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 On the bullish side of new-crop corn's ledger the Dec contract is testing minor (short-term) technical price support at $3.85 1/2, posting a low Tuesday of $3.86 3/4 and overnight of $3.87 1/4. A bearish entry though would be that daily stochastics (short-term momentum study) have not crossed below the oversold level of 20% meaning the contract has more room to move lower. Light support was seen overnight as another day passed with little to no rain across the bulk of the U.S. growing area. While forecasts continue to call for more favorable conditions, weather maps remain largely blank as temperatures start to rise again. Given the recent sell-off corn could try to climb higher, at least early Wednesday.

SOYBEANS Soybeans were able to post small gains overnight into Wednesday morning, though buying interest was less than enthusiastic. In the old-crop market, all eyes have already turned to the June 30 USDA Quarterly Stocks report. The growing general consensus is that USDA has a "tendency" to overestimate U.S. ending stocks, meaning a bullish surprise could be seen when stocks on hand as of June 1 are revealed. As for new-crop, traders will take a look at weather maps and see a mostly clean slate with the only green running along the far southern Delta and up the East Coast. With temperatures expected to rise across the U.S. Midwest this week, traders could spend the day buying back some of what was sold Monday and Tuesday.

WHEAT A sell-off in Minneapolis spring wheat helped pull winter wheat markets lower overnight into Wednesday morning. However, pressure in Minneapolis didn't appear to be heavy as commercial traders slept through the session. The key to spring wheat should continue to be the inverse in its new-crop forward curve, reflecting continued concern over weather related production problems. A look at rainfall the last 24 hours shows little across the Northern Plains, and only blotches of activity across parts South Dakota early Wednesday morning. While this may be enough to put light pressure on the HRS market, it isn't expected to reverse the strong uptrend in either futures or spreads. As for winter wheat, harvest continues to chug along across the U.S. Southern Plains (HRW) and Midwest (SRW).

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

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