DTN Early Word Grains
Burned
December corn was 7 cents lower, November soybeans were 20 cents lower, and September Minneapolis (HRS) wheat was 9 cents lower.
CME Globex Recap:Grains and oilseeds posted solid sell-offs overnight with November soybeans losing as much as 23 cents during the session. This despite another generally dry weekend for much of the U.S. Midwest, with the only change in weather rains seen last Friday and subsequent "cooler" temperatures. Outside commodities were generally lower as well with only gold, silver, and cocoa showing gains. DJIA futures were also down, while the U.S. dollar index posted a small rally.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 31.71 points (0.2%) lower at 21,580.07, the NASDAQ Composite lost 2.25 points to 6,387.75, and the S&P 500 slipped 0.91 point to 2,472.54 Friday. DJIA futures were 27 points lower early Monday morning. Asian markets closed mostly higher with Japan's Nikkei down 124.08 points (0.6%), Hong Kong's Hang Seng gaining 140.74 points (0.5%), and China's Shanghai Composite up 12.62 points (0.4%). European markets were trading lower with London's FTSE 100 losing 78.07 points (1.0%), Germany's DAX down 80.46 points (0.7%), and France's CAC 40 falling 17.47 points (0.3%). The U.S. dollar index gained 0.03 to 93.89. September 30-year T-Bonds were 2/32 lower at 154'23 while August gold gained $2.40 to $1,257.30. Crude oil was $0.05 lower at $45.77 while Brent crude dipped $0.03 to $48.03. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | The weather hasn't changed much over the U.S. Midwest, meaning corn buyers could be waiting on the sidelines until late in the day, ahead of NASS' weekly crop condition update. | 1) | Spillover selling from soybeans is expected to pressure corn early Monday. |
| 2) | Weekly export inspections of soybeans could come in bullish Monday morning. | 2) | November soybeans look to have jumped into Wave C of its 3-wave downtrend with both feet overnight. |
| 3) | It might be easier to just not watch the wheat complex Monday rather than try to find a bullish nugget. | 3) | Minneapolis spring wheat continues to indicate the top is on its recent short-supply spike rally. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn fell at the open of Sunday night's session with both old-crop September and new-crop December leaving price gaps on their respective daily charts. Was anything dramatically changed due to the sell-off? From a technical point of view the answer is still no. Dec corn fell to a low of $3.84 3/4, a move that looks to be a test of minor support at $3.84 1/4. This price marks the 76.4% retracement level of thee previous rally from $3.74 through the high of $4.17 1/4. If this support breaks look for the contract to test its previous low. Keep an eye on volume Monday to see if it increases during a down day, as compared to lighter trade volume on recent rallies. Fundamentally corn is still all about the weather, with traders likely waiting on Monday afternoon's weekly crop condition numbers from NASS. A bullish set of numbers, as expected, would set the stage for a bullish turnaround Monday night into Tuesday morning.
SOYBEANS The sell-off in November soybeans looks to be all about the contract's short-term daily chart and the classic 3-wave downtrend it shows. Wave A (first wave) was from the July 11 high of $10.47 to the July 14 low of $9.94. Wave B ran from that low through the July 20 high of $10.31 1/4, a test of the 76.4% retracement level ($10.32 1/4) of Wave A. Last night's sharply lower open kicked off Wave C as Nov beans fell below trendline support at $10.09 signaling a break to at least $9.71 from a technical point of view. However, there is an old price gap sitting between $9.58 and $9.63 the contract may want to fill before rallying again. As with corn, keep an eye on daily trade volume during this sell-off. Also, this move could be nothing more than soybeans' version of the 24-hour flu depending on traders' reaction to Monday afternoon's crop condition update from NASS. One last note for Monday: Weekly export inspections are set for release with soybeans needing solid numbers to stay on pace with USDA's revised July export demand projection.
WHEAT The wheat complex was lower overnight into Monday morning with the highlight once again being commercial selling in the Minneapolis spring market. There the September-to-December spread has seen what once was an inverse of 12 cents evaporate into a carry of over more than 8 cents. The catalyst, as it usually is in a short-supply spike rally, has been the beginning of harvest. Monday afternoon's weekly update from NASS will be watched, but not for crop condition estimates but for its guess regarding how much progress has been made on harvest. Given that, it would not be surprising to see spring wheat stay under pressure Monday meaning winter wheat doesn't have much chance of trading higher either.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.35 | -$0.12 | -$0.45 | Sep | -$0.004 |
| Soybeans: | $9.46 | -$0.03 | -$0.63 | Aug | $0.009 |
| SRW Wheat: | $4.68 | -$0.06 | -$0.31 | Sep | $0.008 |
| HRW Wheat: | $4.29 | -$0.07 | -$0.67 | Sep | $0.004 |
| HRS Wheat: | $7.25 | -$0.13 | -$0.41 | Sep | -$0.004 |
Darin Newsom can be reached at darin.newsom@dtn.com
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