DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 3 cents higher, November soybeans were unchanged, and September Chicago (SRW) wheat was 3 cents higher.

CME Globex Recap:

There weren't many surprises overnight in the grain and oilseed complex with corn and wheat posting small gains through early Friday morning while soybeans stabilized. Outside markets were mixed with softs mostly higher, metals higher, and energies lower. The U.S. dollar index turned lower once again while higher DJIA futures indicate the big board could continue on its record setting run.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 9.86 points higher at 22,026.10, the NASDAQ Composite dipped 22.30 points (0.4%) to 6,340.34, and the S&P 500 lost 5.41 points (0.2%) to 2,472.16 Thursday. DJIA futures were 34 points higher early Friday morning. Asian markets closed mixed with Japan's Nikkei down 76.93 points (0.4%), Hong Kong's Hang Seng gaining 31.67 points (0.1%), and China's Shanghai Composite off 10.85 points (0.3%). European markets were trading mostly higher with London's FTSE 100 up 0.62 point, Germany's DAX adding 14.48 points (0.1%), and France's CAC 40 up 5.49 points (0.1). The euro was 0.0008 higher at 1.1878 while the U.S. dollar index dipped 0.06 to 92.73. September 30-year T-Bonds were 1/32 lower at 154'31 while December gold gained $1.30 to $1,275.70. Crude oil was $0.35 lower at $48.68 while Brent crude lost $0.37 to $51.64. China's Dalian soybean futures were lower and Malaysian palm oil futures were higher overnight.

	BULL		BEAR
1)	Export demand for U.S. corn continues to run ahead of USDA's projected pace.	1)	Old-crop ending stocks remain a bearish factor for new-crop corn.
2)	November soybeans are starting to look more bullish on their short-term daily chart.	2)	Forecasts are calling for cooler, wetter weather that could continue to put pressure on new-crop November soybeans.
3)	Traders could buy into the wheat complex Friday, just because they are tired of selling.	3)	Thursday's weekly export sales figure for wheat of 5.3 mb (for the week ending July 27) was dismal by any measure.

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 Technically, December corn looks ready to turn back up on its short-term daily chart. The contract has been consolidating above its previous low of $3.74 for four sessions allowing daily stochastics (short-term momentum study) to move into position for a bullish signal, possibly at Friday's close. While it would also be technically bullish for daily trade volume to increase, that isn't likely to be seen during Friday's session. Fundamentally, export demand continues to run ahead of USDA's July projection of 2.225 bb, keeping the door open for a possible increase in next week's round of Supply and Demand reports. Also, another weekend is almost here meaning buyers could step back into the market as potential production reductions due to weather continues to be debated.

SOYBEANS The soybean market stabilized overnight with the November contract slowly erasing an initial small loss to sit near unchanged early Friday morning. Technically the minor (short-term) downtrend looks to be running out of momentum as Nov beans sit near minor price support at $9.60 1/2. While one last break to $9.40 remains possible, given the approaching weekend and next week's USDA monthly reports buyers could become more active over the course of Friday's session. Fundamentally, old-crop remains the more interesting story given USDA's track record of underestimating demand. As for new-crop, it's all about weather now that the calendar reads August. Look for commercial buying to emerge Friday, with a light round of noncommercial short-covering to follow. Delivery of 6 contracts was reported against the August issue, putting the total at 2,050 contracts.

WHEAT The key feature of the wheat complex remains the strong downtrends in futures spreads. These trends reflect strong commercial selling that indicates an increasingly bearish supply and demand situation. Whether or not USDA agrees with this remains to be seen in next week's round of monthly Supply and Demand reports. Overnight trade saw all three markets post small gains, due in part to the continued weakness of the U.S. dollar. Also, the recent sharp sell-off in the futures markets could lead to a round of pre-weekend noncommercial buying, for no other reason than it gives them something to do.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.22	-$0.01	-$0.41	Sep	$0.003
Soybeans:	$8.91	-$0.16	-$0.70	Nov	$0.008
SRW Wheat:	$4.27	-$0.03	-$0.31	Sep	$0.004
HRW Wheat:	$3.92	-$0.05	-$0.68	Sep	$0.001
HRS Wheat:	$6.70	-$0.10	-$0.44	Sep	-$0.006

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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