DTN Early Word Grains

It's 1pm Somewhere

6:00 a.m. CME Globex:

December corn was 3 cents lower, November soybeans were 19 cents lower, and September Kansas City (HRW) wheat was 12 cents lower.

CME Globex Recap:

Grains and oilseeds were mostly lower overnight with the heaviest selling seen in Chicago soybeans and winter wheat. Corn may be running low on new sell orders following Wednesday's collapse, though there was enough to maintain pressure through early Thursday morning. Outside markets were mostly higher with softs and metals higher while energies were lower. The U.S. dollar index was down slightly while DJIA futures were higher.

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OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 123.07 points (0.6%) higher at 21,532.14, the NASDAQ Composite gained 67.87 points (1.1%) to 6,261.17, and the S&P 500 added 17.72 points (0.7%) to 2,443.25 Wednesday. DJIA futures were 24 points higher early Thursday morning. Asian markets closed higher with Japan's Nikkei up 1.43 points, Hong Kong's Hang Seng gaining 302.53 points (1.2%), and China's Shanghai Composite adding 20.62 points (0.6%). European markets were trading higher with London's FTSE 100 up 3.62 points, Germany's DAX gaining 32.89 points (0.3%), and France's CAC 40 rallying 33.65 points (0.6%). The euro was down 0.0009 at 1.1404 while the U.S. dollar index dipped 0.02 to 95.74. September 30-year T-Bonds were 14/32 higher at 153'07 while August gold added $2.20 to $1,221.30. Crude oil was $0.26 lower at $45.23 while Brent crude slipped $0.30 to $47.44. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.

BULL BEAR
1) Export shipments of corn are expected to still be bullish following the release of Thursday's weekly numbers. 1) As expected, USDA increased its corn ending stocks estimates for both old-crop and new-crop in Wednesday's reports.
2)

USDA trimmed its projection of U.S. soybean ending stocks by increasing its estimate for export demand.

2) World soybean ending stocks estimates, both old-crop and new-crop, were increased Wednesday.
3) Spring wheat was able to rally overnight, possibly providing light support to winter wheat at some point Thursday. 3) USDA lowered its export demand for U.S. wheat in its July reports.

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 It's possible corn producers are looking forward to Thursday's close, in hopes of not having to watch follow-through carnage from Wednesday's session. Overnight trade saw new-crop December trade lower throughout the session, pushing the contract to test minor (short-term) support on its daily chart between $3.95 3/4 and $3.90 1/2. As of this writing the overnight low was $3.94. Technically the market looks to have just begun a minor downtrend, though daily charts can quickly be trumped by patterns on weekly charts if weather becomes an issue heading into the weekend. Thursday morning's weather maps show a band of rain stretching across the central part of the western Corn Belt. Traders will take note of Thursday's weekly export shipment numbers (for the week ending Thursday, July 6), particularly with USDA holding steady on its projected demand of 2.225 bb. Delivery of 284 contracts was reported against the July issue, putting the total at 9,572 contracts.

SOYBEANS Early Thursday likely has world soybean growers wishing it was closer to closing time than the daily open given the sharp double-digit sell-off seen overnight. Where Wednesday's post-report session saw soybeans fight back on renewed commercial buying interest, overnight saw this same group selling new-crop again. Much of this could be due to weather, with rains seen over parts of the U.S. Midwest Thursday morning and next week's "Death Dome" not looking quite as scary. As with December corn, new-crop November soybeans have established a minor (short-term) downtrend on its daily chart with initial support at $10.14, then $9.93 1/2 and $9.77. The overnight low, as of this writing, was $10.13 3/4. Fundamentally traders will keep an eye on Thursday morning's weekly export sales and shipment numbers (for the week ending Thursday, July 6) for signs of cancellations (sales) or continued strong exports. The previous week's report showed marketing year sales of 2.195 bb already on the books, prompting USDA to increase its demand projection to 2.1 bb from the previous estimate of 2.05 bb. Another interesting tidbit: USDA revised its 2015-2016 export demand figure from 1.936 bb to 1.942 bb, with a like decrease seen in the residual use category to hold ending stocks unchanged at 197 mb. Delivery of 88 contracts was reported against the July issue, putting the total at 5,741 contracts.

WHEAT Winter wheat contracts were posting solid double-digit losses early Thursday morning, likely leading to longing for the closing bell signaling an end to the day's troubles and beginning of the afternoon's attempts at relief. The major fundamental shift seen in Wednesday's USDA Supply and Demand reports was trimming 25 mb off the 2017-2018 marketing year export demand estimate, dropping it to 975 mb. However, given the lowered production estimate (down 64 mb) ending stocks only grew by 14 mb. It's interesting to note that feed demand was also cut by 20 mb. Delivery of 69 contracts was reported against the July Chicago, putting its total at 1,065 contracts. Another 11 contracts were reported delivered against the July Kansas City issue increasing its total to 2,198 contracts.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.41 -$0.16 -$0.45 Sep $0.006
Soybeans: $9.54 -$0.08 -$0.67 Aug $0.001
SRW Wheat: $5.04 -$0.16 -$0.33 Sep $0.002
HRW Wheat: $4.75 -$0.13 -$0.69 Sep $0.003
HRS Wheat: $7.42 -$0.14 -$0.41 Sep -$0.004

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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