DTN Early Word Grains
Monday Might've Been Done Early
December corn was 2 cents higher, November soybeans were 7 cents higher, and September Chicago (SRW) wheat was 2 cents higher.
CME Globex Recap:Grain and oilseed markets opened the Sunday night session higher, extended those gains, then settled into bed for the night. As Monday morning rolled around, it's quite possible markets had seen their trading range, not just for the overnight session, but possibly all of Monday as traders await the next round of weekly crop condition numbers from NASS. Outside markets were lower with both gold and crude oil showing losses despite a weaker U.S. dollar. DJIA futures were higher once again.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 66.71 points (0.3%) higher at 22,092.81, the NASDAQ Composite added 11.22 points (0.2%) to 6,351.56, and the S&P 500 gained 4.67 points (0.2%) to 2,476.83 Friday. DJIA futures were 32 points higher early Monday morning. Asian markets closed mostly higher with Japan's Nikkei up 103.56 points (0.5%), Hong Kong's Hang Seng gaining 127.68 points (0.5%), and China's Shanghai Composite up 17.38 points (0.5%). European markets were trading mixed with London's FTSE 100 up 10.73 points (0.1%), Germany's DAX down 34.70 points (0.3%), and France's CAC 40 up 6.83 points (0.1%). The euro was 0.0028 higher at 1.1801 while the U.S. dollar index dipped 0.07 to 93.42. September 30-year T-Bonds were 1/32 lower at 154'02 while December gold lost $2.00 to $1,262.60. Crude oil was $0.70 lower at $48.88 while Brent crude dipped $0.75 to $51.67. China's Dalian soybean futures posted a solid gain while Malaysian palm oil futures were lower overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Weekly export inspections and weekly crop conditions from NASS are expected to be bullish for corn Monday. | 1) | It's possible corn's weekly inspection number could be seen as bullish and bearish, the latter as marketing year totals continue to draw closer to USDA's demand projection. |
| 2) | The past 7-day precipitation map for soybeans shows a lack of rain continuing across much of the U.S. Midwest and Plains. | 2) | Forecasts continue to call for cooler-than-normal conditions across much of the U.S. Midwest and Plains, possibly pressuring soybeans. |
| 3) | Chicago wheat is indicating its short-term downtrend could be coming to an end. | 3) | Weekly export inspections could come in bearish for all wheat. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN December corn posted a quiet rally overnight, coming close to confirming a move to a minor (short-term) uptrend on its daily chart. Last Friday's higher close led to a bullish crossover by daily stochastics below the oversold level of 20% (a short-term momentum based indicator) hinting at such a move, with Dec corn needing a move to a new 4-day high beyond $3.85 1/2 to confirm. Early overnight trade saw Dec hit a high of $3.84 1/2. Fundamentally the market is expected to see bullish news Monday, with weekly export inspections (for the week ending Thursday, August 3) coming out in the morning and crop conditions later in the afternoon. It's the latter that is likely to garner the most attention, meaning the market could stay quiet until the open of the next overnight session Monday evening.
SOYBEANS The soybean market was higher early Monday morning with new-crop November rallying on what was a relatively dry first week of August across much of the U.S. Midwest and Plains. Technically Nov beans continue to hold above minor (short-term) price support at $9.53 1/4, allowing daily stochastics (short-term momentum indicator) to move toward a signal that the recent minor downtrend has ended and an uptrend has begun. However, a few days of consolidation may be ahead, which brings USDA's next round of monthly reports (set for release Thursday, August 10) into play. Fundamentally soybeans have moved into the weather spotlight now that the calendar reads August. Monday morning finds the debate over dry weather versus cooler temperatures heating up, with the requisite chatter regarding Monday afternoon's weekly crop condition numbers from NASS already present. Delivery of 343 contracts was reported against the August issue, putting the total at 2,393 contracts.
WHEAT From a technical point of view, winter wheat markets look to be in position to turn short-term bullish. The September Chicago contract has seen its minor downtrend extend well below support at $4.64 1/2, hitting a low of $4.53 1/2 last Friday. The degree of the sell-off, and the contract's ability to close near session lows repeatedly, had its daily stochastics (short-term momentum indicator) in single digits as last week came to an end. As an indicator, stochastics show a market is oversold when it reaches 20%. Monday morning finds Chicago wheat's stochastics near 4.5%. While this could spark a rally, wheat has been known to stay in a sharply oversold position for varying lengths of time. Fundamentally there is little change, with a strong carry in the market's forward curve continuing to reflect a long-term bearish view of supply and demand.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.25 | $0.03 | -$0.41 | Sep | $0.000 |
| Soybeans: | $8.88 | -$0.03 | -$0.68 | Nov | $0.012 |
| SRW Wheat: | $4.25 | -$0.01 | -$0.30 | Sep | $0.015 |
| HRW Wheat: | $3.92 | $0.00 | -$0.68 | Sep | -$0.002 |
| HRS Wheat: | $6.73 | $0.03 | -$0.44 | Sep | -$0.002 |
Darin Newsom can be reached at darin.newsom@dtn.com
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