DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 1 cent higher, November soybeans were 4 cents higher, and September Chicago (SRW) wheat was 5 cents higher.

CME Globex Recap:

Commodities in general were higher early Thursday morning, due in part to Wednesday's sharp sell-off by the U.S. dollar index. Gold posted the most impressive rally, up $12, while crude oil struggled to follow-through on Wednesday's rally. Grains were higher across the board on the idea it wasn't where rains fell yesterday (across most of the U.S. Midwest), but when (maybe too late to help some of the corn crop).

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 97.58 points (0.5%) higher at 21,711.01, the NASDAQ Composite gained 10.57 points (0.2%) to 6,422.75, and the S&P 500 added 0.70 to 2,477.83 Wednesday. DJIA futures were 26 points higher early Thursday morning. Asian markets closed higher with Japan's Nikkei up 29.48 points (0.2%), Hong Kong's Hang Seng gaining 190.15 points (0.7%), and China's Shanghai Composite rallying 2.11 points. European markets were trading mixed with London's FTSE 100 adding 0.47, Germany's DAX down 70.47 points (0.6%), and France's CAC 40 up 2.85 points. The euro was 0.0027 lower at 1.1707 while the U.S. dollar index gained 0.22 to 93.62. September 30-year T-Bonds were 9/32 lower at 152'28 while August gold rallied $12.00 to $1,261.40. Crude oil was $0.02 higher at $48.77 while Brent crude added $0.03 to $51.00. China's Dalian soybean and Malaysian palm oil futures were both higher again overnight.

	BULL		BEAR
1)	Weekly export shipments could come in larger than needed in corn.	1)	If soybeans turn lower, corn could follow.
2)	Soybeans could try to extend its overnight rally through early Thursday morning.	2)	There are a number of potentially bearish factors soybeans could face Thursday, from both fundamentals and technicals.
3)	The short-term downtrend in winter wheat may have run its course.	3)	Strong commercial selling continues to dominate the spring wheat futures market.

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 Corn continued its rally overnight, seemingly ignoring rains seen across the U.S. Midwest Wednesday. Some of this could be due to the idea rains came too late for parts of the growing area, while others needing rain only received light coverage. Thursday will see the release of the latest drought monitor map from NOAA, for conditions through this past Tuesday (before the rains came), and likely showing an increase in severity of conditions across the U.S. Midwest. Also, weekly export sales and shipments for the week ending Thursday, July 20 are set for release, with corn needing shipments of 39.6 mb to stay on pace with USDA's current demand projection of 2.225 bb. Last reported weekly shipments were 41.0 mb. Technically Dec corn is holding near support on its daily chart at $3.84 1/4, though continued commercial selling could still lead to a test of its previous low of $3.74.

SOYBEANS November soybeans are an interesting study on the short-term daily chart. The contract looks to be in the process of establishing a double-bottom near $9.84 despite the fact momentum studies haven't moved below the oversold level of 20%. Meanwhile the contract has rallied to test technical price resistance at $10.08 with the next level up at $10.15 1/2. Fundamentally, if Wednesday's rain was timely for a crop it was likely soybeans more than corn. Yet again, new-crop soybeans are rallying with at least some of the buying interest coming from commercial traders. It's possible there is an undercurrent of an idea that USDA is overestimating old-crop ending stocks (new-crop beginning stocks again) meaning traders will keep an eye on the latest weekly export shipment number (for the week ending Thursday, July 20) set for release Thursday morning. Soybeans need shipments of 18 mb to stay on pace with USDSA's July demand estimate of 2.1 bb. Last week's report showed only 13.2 mb.

WHEAT The wheat complex was higher overnight, once again led by the resurgent Minneapolis spring market. While the latter posted a strong double-digit rally Wednesday, commercial selling continued as the carry in the September-to-December futures spread strengthened to 10 cents. Traders will keep an eye on both that spread and the December-to-March for signs that commercial pressure is easing. As for winter wheat, look for both Chicago and Kansas City to be followers of spring wheat and the rest of the grain and oilseed complex Thursday. However, contracts for both are indicating short-term downtrends may have run their course and could now look at building bases.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.29	$0.04	-$0.44	Sep	$0.002
Soybeans:	$9.27	$0.07	-$0.62	Aug	$0.002
SRW Wheat:	$4.47	$0.04	-$0.31	Sep	$0.002
HRW Wheat:	$4.10	$0.02	-$0.65	Sep	-$0.003
HRS Wheat:	$6.90	$0.13	-$0.40	Sep	$0.000

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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