DTN Early Word Grains
Fat-Finger Freddy Strikes Again, Maybe
December corn was 1 cent higher, November soybeans were 4 cents higher, and July Kansas City (HRW) wheat was 7 cents lower.
CME Globex Recap:The first thing that catches one's eye looking at market early Monday is the sharp reversal in gold. After trading about $2.50 higher Sunday evening, Monday morning finds that the August contract posted a low down almost $20 from Friday's close. A quick search of the news finds only a one-line message about a flash crash tied to a fat-fingered trade. The market had stabilized near support at $1,231, and didn't seem to have an effect on any other market than silver. As for grains, contracts did little after Sunday evening's opening half-hour.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 2.53 points lower at 21,394.76, the NASDAQ Composite gained 28.56 points (0.5%) to 6,265.25, and the S&P 500 added 3.80 points (0.2%) to 2,438.30 Friday. DJIA futures were 66 points higher early Monday morning. Asian markets closed mostly higher with Japan's Nikkei up 20.68 points (0.1%), Hong Kong's Hang Seng gaining 201.84 points (0.8%), and China's Shanghai Composite adding 27.57 points (0.9%). European markets were trading higher with London's FTSE 100 up 52.77 points (0.7%), Germany's DAX rallying 96.62 points (0.8%), and France's CAC 40 up 50.68 points (1.0%). The euro was lower at 1.1181 while the U.S. dollar index was 0.09 higher at 97.39. September 30-year T-Bonds were 3/32 lower at 156'17 while August gold dropped $12.80 to $1,243.60, off its overnight low of $1,236.50. Crude oil was $0.24 higher at $43.25 while Brent crude added $0.18 to $45.72. China's Dalian soybean futures were quietly mixed while Malaysian palm oil futures were closed overnight.
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| 1) | Weather maps for rainfall the last seven days shows only sparse coverage for much of the U.S. corn growing area. | 1) | Forecast maps show solid chances of rain for much of the U.S. corn growing area this coming week. |
| 2) | There is a strong possibility this coming Friday's quarterly stocks number could be viewed as bullish soybeans. | 2) | Daily, weekly, and monthly soybean charts are all showing downtrends. |
| 3) | Minneapolis spring wheat remains the bullish rock winter wheat is tied to. | 3) | Winter wheat markets could see increased commercial selling coming out of a harvest weekend. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN It's shaping up to be another Monday morning stare down between those looking at sparse rains on weather maps showing activity the last seven days and those following forecast maps promising more rain for the U.S. Midwest this coming week. Technically the path of least resistance remains down (for more information, see this weekend's updated Technically Speaking blog post), with attention turning to major (long-term) signals on the market's monthly chart. Closer to home, the cash market is following the combined patterns of its 3-year and 10-year seasonal studies that show a sharp sell-off through early October. The DTN National Corn Index (national average cash price) lost 26 1/4 cents last week as new-crop December fell 26 3/4 cents.
SOYBEANS With the end of June fast approaching, technical eyes have turned to soybeans' long-term monthly chart. There we see the July contract has moved to the lowest price ($9.00 1/4) since March 2016. At that time the market was rallying off its low of $8.44 1/4 rather than making its way back toward that mark, as soybeans seem to be doing in mid-2017. The silver lining of the dark cloud that continues to hang over the market's head is that monthly stochastics (long-term momentum study) have moved below 20% indicating soybeans could be considered oversold. While this might not jump start new buying interest, it could at least slow the pace of selling. Fundamentally this week should be another battle between those that look backward at actual data versus those who prefer guessing about the future. This pertains to both weather maps early Monday and USDA's Quarterly Stocks and Acreage reports set for release this coming Friday.
WHEAT The wheat complex saw a change of pace early Monday: Spillover pressure from winter wheat was enough to pull Minneapolis spring wheat lower. Not that the latter hasn't been waving warning flags about a possible top, given the slight weakening of the inverse in its new-crop September-to-December futures spread. If spring wheat does decide to fall back this week, there might not be much buying interest in either Chicago or Kansas City to slow the fall. Harvest of both SRW and HRW continues to chug along, with Friday afternoon's progress report expected to show few weather delays from the previous week. And if overnight activity is any indication, both winter wheat markets could see increased commercial selling to start the week.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.19 | -$0.05 | -$0.38 | Jul | -$0.002 |
| Soybeans: | $8.40 | $0.00 | -$0.64 | Jul | -$0.004 |
| SRW Wheat: | $4.40 | -$0.01 | -$0.20 | Jul | $0.009 |
| HRW Wheat: | $4.03 | -$0.03 | -$0.61 | Jul | $0.007 |
| HRS Wheat: | $6.22 | $0.05 | -$0.39 | Jul | $0.005 |
Darin Newsom can be reached at darin.newsom@dtn.com
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