DTN Early Word Grains
Watson Doesn't Live Here Anymore
December corn was 3 cents higher, November soybeans were 7 cents higher, and September Minneapolis (HRS) wheat was 5 cents lower.
CME Globex Recap:Corn and the soybean complex were trading higher early Thursday as rain continues to elude the bulk of the U.S. Midwest. Chicago is expected to see some rain over the course of the day, but that doesn't have the same perceived effect on grain and oilseed markets that it used to given computerized trade is global rather than local. Wheat markets were lower as it appears Minneapolis spring wheat has reached the harvest tipping point most weather driven, short-supply spike rally markets tend to find.
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The Dow Jones Industrial Average closed 66.02 points (0.3%) higher at 21,640.75, the NASDAQ Composite gained 40.74 points (0.6%) to 6,385.04, and the S&P 500 added 13.22 points to 2,473.83 Wednesday. DJIA futures were 11 points higher early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei up 132.73 points (0.6%), Hong Kong's Hang Seng gaining 68.05 points (0.3%), and China's Shanghai Composite up 13.89 points (0.4%). European markets were trading mostly higher with London's FTSE 100 up 42.71 points (0.6%), Germany's DAX adding 47.57 points (0.4%), and France's CAC 40 rallying 13.52 points (0.3%). The euro was down 0.0011 at 1.1504 while the U.S. dollar index gained 0.23 to 95.03. September 30-year T-Bonds were unchanged at 153'30 while August gold lost $5.30 to $1,236.70. Crude oil was $0.03 lower at $47.09 while Brent crude dipped $0.01 to $49.69. China's Dalian soybean futures were mostly higher (lower nearby, higher deferred) and Malaysian palm oil futures were higher overnight.
| BULL | BEAR | ||
| 1) | Another hot, dry day is ahead for much of the U.S. corn growing area Thursday. | 1) | Trade volume on corn's up days continues to be lower than it was on its down days, a bearish technical signal. |
| 2) | Hot, dry forecasts should also provide support to soybeans. | 2) | November soybeans are testing short-term resistance levels on its daily chart. |
| 3) | Wheat could struggle to find a bullish nugget Thursday, with the best bet a largely irrelevant weekly export sales number. | 3) | Minneapolis spring wheat futures spreads are in sharp downtrends, indicating continued commercial selling. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Except for a swath of rain covering southern Wisconsin and northern Illinois, including Chicago, the Thursday morning radar map is largely a blank slate again. This generated enough buying interest to hold corn contracts higher overnight through early Thursday morning, as the December contract continues in its attempt to generate buying enthusiasm. Wednesday's session saw a familiar pattern of an overnight through early mid-morning erode over the rest of the session. More of the same could be seen Thursday given the technical factor that trade volume remains lower on this week's up days than it was on last week's down days. Traders will also take a look at weekly export shipment numbers (for the week ending Thursday, July 13) to see if corn exports continue to slow.
SOYBEANS Soybeans were trading higher again early Thursday morning as the new-crop November contract continues to chew its way through minor (short-term) resistance patterns on its daily chart. With its short-term trend still down, November beans are sitting just below next resistance at $10.23 with the next target up at $10.32. A move through those levels would put the contract in position to test its recent high of $10.47. Fundamentally the story is the same as corn with the new-crop market dependent on weather developments while old-crop continues to see solid export demand. Thursday weekly shipment number (for the week ending Thursday, July 13) will be watched closely given USDA's increased demand estimate in its July Supply and Demand report.
WHEAT Though overnight trade volume was light, futures spread activity in Minneapolis spring wheat indicates continued commercial selling was seen. The September contract has seen its strong double-digit inverse to the December quickly flipped to a strengthening carry, a solid indicator that the short-supply spike rally in the futures market is coming or has come to an end. If so it means 2017 spring wheat has moved away from caring about hot and dry weather to accepting high protein wheat is being harvested, just not many bushels. Winter wheat markets that have ridden spring wheat's coattails are also trading lower Thursday morning, with little fundamental reason to rally at this time.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.38 | $0.05 | -$0.44 | Sep | -$0.005 |
| Soybeans: | $9.35 | $0.11 | -$0.64 | Aug | $0.002 |
| SRW Wheat: | $4.72 | $0.01 | -$0.31 | Sep | $0.013 |
| HRW Wheat: | $4.34 | -$0.02 | -$0.66 | Sep | $0.004 |
| HRS Wheat: | $7.34 | -$0.05 | -$0.41 | Sep | $0.002 |
Darin Newsom can be reached at darin.newsom@dtn.com
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