DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was fractionally lower, November soybeans were 1 cent lower, and September Chicago (SRW) wheat was 2 cents higher.

CME Globex Recap:

Corn and soybeans were showing small losses early Friday morning, moves that likely won't last the day let alone the latter stage of the overnight session. Other markets were mixed with wheat higher, energies mostly higher, while metals and softs were lower. Meanwhile the U.S. dollar index remains volatile, showing a solid sell-off. DJIA futures were also seeing strong selling interest.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 85.54 points (0.4%) higher at 21,796.55, the NASDAQ Composite lost 40.56 points (0.6%) to 6,382.19, and the S&P 500 dipped 2.41 to 2,475.42 Thursday. DJIA futures were 42 points lower early Friday morning. Asian markets closed mostly lower with Japan's Nikkei down 119.80 points (0.6%), Hong Kong's Hang Seng off 151.78 points (0.6%), and China's Shanghai Composite adding 3.46 points (0.1%). European markets were trading lower with London's FTSE 100 down 52.16 points (0.7%), Germany's DAX off 92.96 points (0.8%), and France's CAC 40 falling 74.66 points (1.5%). The euro was 0.0036 higher at 1.1713 while the U.S. dollar index fell 0.20 to 93.71. September 30-year T-Bonds were 7/32 lower at 152'12 while August gold dropped $1.80 to $1,258.20. Crude oil was $0.06 higher at $49.10 while Brent crude added $0.25 to $51.74. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	Short-term technical support continues to hold the December corn contract.	1)	If selling is seen in the rest of the grain and oilseed complex, corn could follow.
2)	Dry weather forecasts could keep buyers interested in new-crop soybeans.	2)	The hourly chart for November soybeans shows the contract could still see a round of selling Friday morning.
3)	The short-term downtrend in winter wheat looks to have come to an end this week.	3)	The wheat complex remains vulnerable to renewed commercial selling in Minneapolis spring wheat.

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 contracts were fractionally lower early Friday morning, with sellers unconvincing in their conviction. For now the December contract continues to hold above minor (short-term) support at $3.84 1/4, while daily trade volume has decreased throughout the week. The market appears poised for renewed buying interest, particularly if a drier forecast for much of the U.S. Midwest for the coming week is added into the equation. Though activity for much of the week, and overnight, has been quiet the market could still see a normal weather market weekend, albeit late in its season. That means increased volume and volatility on Friday, possible follow-through activity Sunday night into Monday morning, and then increased volatility Monday night into Tuesday morning after the release of the next round of NASS' weekly crop condition numbers.

SOYBEANS Soybean contracts were showing small losses early Friday. However, the November contract didn't really follow-through on bearish technical signals seen on its hourly chart that suggested a sharper break during the overnight session. Support was found overnight near $10.01 1/2, the 38.2% retracement level of the contract's previous micro uptrend from $9.84 1/2 through Thursday's high of $10.12 1/2. With the contract still testing resistance at $10.07 3/4, a break to next support at $9.98 1/2 is still possible. Fundamentally there is little reason for such a move, particularly with weather forecasts for much of the U.S. growing area drying out for the foreseeable future.

WHEAT The wheat complex was higher early Friday following a relatively quiet overnight session. September contracts for both Chicago (SRW) and Kansas City (HRW) markets are indicating recent short-term downtrends are ending, possibly leading to new minor uptrends. Meanwhile, the highlight of the wheat complex continues to be commercial activity in the Minneapolis (HRS) market. While this activity took a breather Thursday, spread trends remain down reflecting stronger carry (September-to-December) and weakening inverse (December-to-March). Both continue to show a more bearish view of the market's supply and demand situation. As for the U.S. dollar index, wild moves this week have not translated to increased volatility in wheat. However, if the USDX continues to show more of a downtrend over the coming weeks it could spark renewed commercial buying interest in the complex.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.31	$0.02	-$0.43	Sep	$0.007
Soybeans:	$9.33	$0.07	-$0.61	Aug	$0.007
SRW Wheat:	$4.48	$0.02	-$0.32	Sep	-$0.005
HRW Wheat:	$4.15	$0.05	-$0.66	Sep	-$0.003
HRS Wheat:	$6.95	$0.05	-$0.41	Sep	-$0.010

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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