DTN Early Word Grains
Look at That "S"-Car Go!
December corn was 1 cent higher, November soybeans were 5 cents higher, and September Minneapolis (HRS) wheat was 24 cents higher.
CME Globex Recap:Grains were higher early Thursday, once again led by Minneapolis spring wheat and soybeans. The former now clicks off 20-cent rallies routinely while the latter continues to see commercial buying. Winter wheat contracts also saw solid gains while corn could only muster a fractional rally. Outside markets were mostly higher, with only gold showing a small loss, supported by the continued late-month sell-off by the U.S. dollar index.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 143.95 points (0.7%) higher at 21,454.61, the NASDAQ Composite gained 87.79 points (1.4%) to 6,234.41, and the S&P 500 rallied 21.31 points (0.9%) to 2,440.69 Wednesday. DJIA futures were 7 points higher early Thursday morning. Asian markets closed higher with Japan's Nikkei up 89.89 points (0.5%), Hong Kong's Hang Seng gaining 281.92 points (1.1%), and China's Shanghai Composite adding 14.86 points (0.5%). European markets were trading mostly lower with London's FTSE 100 up 21.73 points (0.3%), Germany's DAX off 20.62 points (0.2%), and France's CAC 40 down 31.93 points (0.6%). The euro was 0.0030 higher at 1.1408 while the U.S. dollar index fell another 0.18 to 95.86. September 30-year T-Bonds were 13/32 lower at 154'19 while August gold lost $2.50 to $1,246.60. Crude oil was $0.24 higher at $44.98 while Brent crude added $0.20 to $47.51. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.
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| 1) | Spillover buying from other grains could support corn early Thursday. | 1) | Morning weather radar maps show more rain in parts of the Corn Belt, possibly putting pressure on new-crop December corn. |
| 2) | Renewed commercial buying was seen overnight in old-crop soybeans. | 2) | Soybeans long-term monthly chart continues to show a downtrend. |
| 3) | Minneapolis spring wheat is racing toward its next long-term upside target of $8.00. | 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 COMMENTSCORN Corn contracts posted quiet rallies overnight, supported by spillover buying from the other grains and oilseeds. New-crop December continues to hint at a possible short-term bottoming formation on its daily chart as it consolidates above last Friday's low of $3.74. However, morning weather maps show another rain storm moving across northern Missouri while the 24-houur precipitation map shows general rains over the central Corn Belt, including eastern Nebraska, Minnesota, and Iowa Wednesday. Traders will take note of Thursday morning's weekly export sales and shipment numbers, with shipments still running ahead of USDA's projected pace though this lead continues to be whittled back week by week. It's interesting to note that the DTN National Corn Index (national average cash price) was calculated at $3.19 3/4 Wednesday evening, a price that puts it in the lower 5% of its daily distribution range dating back to the beginning of the 2006-2007 marketing year.
SOYBEANS Old-crop soybean futures spreads saw a slight weakening of carry overnight, hinting at renewed commercial buying interest. While low volume trade is always a possibility, if commercial traders are showing more interest it would be an interesting turn of events given the recent move to a near bearish level of full commercial carry by the July-to-August spread. Old-crop soybeans could still see some bullish fundamental news this week starting with Thursday's weekly Export Sales and Shipments report (for the week ending Thursday, June 22) and Friday's Quarterly Stocks report (through June 1). Technically, July corn has rallied off its recent low of $9.00 1/4, though the upside could be limited to resistance at $9.45 1/2.
WHEAT Minneapolis spring wheat is strong. That is an understatement, as the new-crop September contract clicked off another 24-cent rally overnight through early Thursday morning. A look at the market's long-term monthly chart shows an uptrend that actually began back in March 2016, the market spinning its wheels until finding traction this month. The next long-term, according to retracements, is $8.00, then $9.07. Given the market's inverted forward curve, a reflection of a bullish supply and demand situation, this market's potential can't be overestimated. For now winter wheat markets are content to ride along behind, albeit a considerable distance. For example, the spread between the DTN National Hard Red Spring Wheat Index and the DTN National Hard Red Winter Wheat Index has reached $2.63, fast approaching its previous high of $2.78 from early May 2011.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.20 | -$0.02 | -$0.37 | Jul | $0.006 |
| Soybeans: | $8.52 | $0.04 | -$0.62 | Jul | $0.016 |
| SRW Wheat: | $4.40 | $0.06 | -$0.18 | Jul | $0.016 |
| HRW Wheat: | $4.04 | $0.05 | -$0.57 | Jul | $0.011 |
| HRS Wheat: | $6.67 | $0.24 | -$0.38 | Jul | $0.005 |
Darin Newsom can be reached at darin.newsom@dtn.com
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