DTN Early Word Grains

A Queen Playlist Morning

6:00 a.m. CME Globex:

December corn was fractionally higher, November soybeans were 2 cents higher, and September Minneapolis (HRS) wheat was 7 cents higher.

CME Globex Recap:

Grains were mostly higher early Wednesday, led by another strong rally in Minneapolis spring wheat and anchored by a corn market that didn't want to stray from unchanged. Morning weather maps show a storm system moving out of Nebraska, heading east, and now stretching across the width of Iowa. Meanwhile, the last 24 hours saw little change in the dry conditions across the Northern Plains. The highlight of outside markets remains the meltdown of the U.S. dollar index providing support to gold.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 98.89 points (0.5%) lower at 21,310.66, the NASDAQ Composite lost 100.53 points (1.6%) to 6,146.62, and the S&P 500 fell 19.69 points (0.8%) to 2,419.38 Tuesday. DJIA futures were 16 points higher early Wednesday morning. Asian markets closed lower with Japan's Nikkei down 94.68 points (0.5%), Hong Kong's Hang Seng off 156.49 points (0.6%), and China's Shanghai Composite losing 18.00 points (0.6%). European markets were trading lower with London's FTSE 100 down 3.80 points, Germany's DAX off 64.28 points (0.5%), and France's CAC 40 down 18.11 points (0.3%). The euro was 0.0029 higher at 1.1368 while the U.S. dollar index fell another 0.25 to 96.22. September 30-year T-Bonds were 1 10/32 lower at 154'12 while August gold rallied $6.50 to $1,253.40. Crude oil was $0.16 lower at $44.08 while Brent crude dipped $0.07 to $46.58. China's Dalian soybean futures were higher and Malaysian palm oil futures were slightly lower overnight.

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BULL BEAR
1) Spillover buying from soybeans could support old-crop Wednesday. 1) Morning weather radar shows rains stretching across Iowa, possibly putting pressure on new-crop December corn.
2) The collapse of the U.S. dollar could lead to new export demand for U.S. soybeans. 2) Soybeans long-term monthly chart continues to show a downtrend
3) Minneapolis spring wheat has extended its rally to near $7.00, a price not seen since June 2014. 3)

Winter wheat harvest continues to move along, putting increased commercial pressure on the Chicago and Kansas City markets.

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 King Corn's Queen song of the day must surely be "Somebody to Love". With USDA's Quarterly Stocks and Acreage report just over 48 hours away the old-crop market is mired near the low end of its sideways trend. The market's monthly chart shows a nothing but a long-term sideways trend. And seasonal studies show the DTN National Corn Index (national average cash price) tend to trend down. As for new-crop, December corn can't seem to convince anyone to buy despite rumors of losing acres to soybeans from the March 31 Prospective Plantings report and a Mother Nature showing her mean side so far this growing season. Borrowing a line from the song of the day, corn keeps telling itself, "I just gotta get out of this prison cell. Someday I'm going to be free." Maybe not free, but another bearish breakdown could take the cash market into the lower-$3 to upper-$2 range.

SOYBEANS The first song on soybeans' playlist is likely Queen's "Bohemian Rhapsody", known for its many different styles. The soybean market seems to be bullish and bearish all at the same time. Data showing old-crop soybeans should be able to extend small overnight rallies are swept away by the familiar chorus of neutral futures spreads and bearish basis. The U.S. dollar losing ground to the Brazilian real has total sales running well ahead of USDA's projected demand, yet the market's long-term downtrend has the DTN National Soybean Index mired in the lowest percentages of its 10-year price distribution range. Similarly, new-crop November is dealing with the strong likelihood of stealing acres from corn, a crime that likely has market bulls saying "gotta leave you all behind and face the truth".

WHEAT Minneapolis spring wheat has Queen's "Don't Stop Me Now" blaring as it zooms past the Chicago (and Kansas City) grain markets. New-crop September pushed to $6.95 overnight, the market's highest price since June 2014. In other words, the contract is "a rocket ship on its way to Mars". Meanwhile, winter wheat contracts were only able to manage rallies of just over a penny as both Chicago and Kansas City continue to fight through commercial selling tied to harvest. Regardless, both are in long-term uptrends on monthly charts that aren't expected to be swayed by Friday's Quarterly Stocks report. Look for additional support Wednesday to come from the continued collapse of the U.S. dollar index.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.22 $0.00 -$0.38 Jul $0.002
Soybeans: $8.48 $0.05 -$0.64 Jul $0.006
SRW Wheat: $4.34 $0.04 -$0.19 Jul $0.004
HRW Wheat: $3.99 $0.05 -$0.58 Jul $0.012
HRS Wheat: $6.43 $0.18 -$0.38 Jul $0.003

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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