DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 11 cents higher, November soybeans were 13 cents higher, and September Minneapolis (HRS) wheat was 20 cents higher.

CME Globex Recap:

Grain and oilseed markets posted a strong rally overnight following a bullish set of weekly crop condition numbers from NASS Monday afternoon. Additional support came from the lower U.S. dollar index, and weather maps that show no relief in sight for the hot and dry conditions blanketing many of the U.S. growing areas this summer. Outside markets were also supported by the weakening greenback, though gains in gold and crude oil were small. Softs were also higher as cotton tries to build on Monday's bullish breakout.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 8.02 points lower at 21,629.72, the NASDAQ Composite gained 1.97 points to 6,314.43, and the S&P 500 slipped 0.13 point to 2,459.14 Monday. DJIA futures were 17 points higher early Tuesday morning. Asian markets closed mixed with Japan's Nikkei down 118.95 points (0.6%), Hong Kong's Hang Seng gaining 54.36 points (0.2%), and China's Shanghai Composite up 11.10 points (0.4%). European markets were trading mixed with London's FTSE 100 up 5.08 points, Germany's DAX down 70.13 points (0.6%), and France's CAC 40 off 15.38 points (0.3%). The euro was up 0.0074 at 1.1553 while the U.S. dollar index fell 0.48 to 94.67. September 30-year T-Bonds were 2/32 higher at 152'30 while August gold added $2.70 to $1,236.40. Crude oil was $0.11 higher at $46.13 while Brent crude rallied $0.14 to $48.56. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower overnight.

	BULL		BEAR
1)	The DTN Crop Condition Index for corn dropped 3 points Monday afternoon to 152 points.	1)	As of Tuesday morning, 2017 corn is still on track for an average yield of almost 167 bpa, putting production estimates just under 14 bb.
2)	The DTN Crop Condition Index for soybeans came in 1 point lower than the previous week at 146 points.	2)	The minor (short-term) trend in November soybeans remains down.
3)	The DTN Crop Condition Index for spring wheat was calculated at 37 points Monday afternoon, down 7 points from the previous week.	3)	Early harvest is happening in spring wheat, often an event that leads to the end of a short-supply spike rally.

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 Monday afternoon's release of the latest NASS crop condition numbers resulted in a DTN Crop Condition Index for corn of 152 points, down three points from the previous week. Through the first nine reporting weeks, the 2017 crop is averaging 159 points, still close to the 160 points seen during the summer of 2013. That year final national average yield came in above DTN's calculated trendline yield of 157.6 bpa, leading to a 2017 projected national average yield of 166.8 bpa, also slightly above DTN's calculated trendline of 166.3 bpa. In reality, though, with forecast maps showing no relief coming to the U.S. Midwest this week, yield estimates are poised for further trimming in the weeks to come. Technically, corn markets (old-crop futures, new-crop futures, and cash) remain a mix of signals with the overriding factor still bullish long-term patterns on monthly charts. This would suggest new-crop December should revisit its recent high of $4.17 1/4 on its way to the longer-term target of $4.30 1/4.

SOYBEANS Though it still seems early for new-crop soybeans to be swept up in a full-blown weather market, swept up they are as the November contract posted a strong double-digit rally following Monday's crop condition numbers from NASS. This weekly set of data resulted in a DTN Crop Condition Index for soybeans of 146 points, down one point from the previous week. Through the first six reporting weeks, soybeans are averaging an index rating of 155 points, slightly below the 158 points registered for the same time frame in 2015. That year saw the crop reportedly come in at the second highest national average yield on record of 48 bpa. According to USDA's July Crop Production report, that roughly was projected for the 2017 crop, as well. Technically, November soybeans remain in a minor (short-term) downtrend with the recent rally looking like Wave B (second wave) of a 3-wave move. Resistance is pegged at $10.15 1/2, $10.23, and $10.32 1/4.

WHEAT The wheat complex is led by Minneapolis spring wheat again Tuesday morning, after NASS once again lowered its weekly crop condition ratings Monday afternoon. The latest set of numbers from the government resulted in a DTN Crop Condition Index for spring wheat of 37 points, down 7 points from the previous week and one of the lowest weekly readings on record. Technically the September contract remains a volatile mix of signals with the bottom line being traders will continue to support the market, until they don't. That's normal for all short-supply spikes, with the top usually occurring as harvest gets rolling. A Monday morning conference among DTN analysts included news that early spring wheat harvest was getting under way, meaning the market needs to be handled carefully.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.31	-$0.01	-$0.44	Sep	$0.005
Soybeans:	$9.20	-$0.04	-$0.65	Aug	$0.002
SRW Wheat:	$4.75	-$0.03	-$0.31	Sep	$0.013
HRW Wheat:	$4.40	-$0.06	-$0.66	Sep	$0.008
HRS Wheat:	$7.26	$0.08	-$0.42	Sep	-$0.014

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

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

(KA)

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