DTN Early Word Grains
High Noon (Eastern Time)
December corn was unchanged, November soybeans were 5 cents higher, and September Chicago (SRW) wheat was fractionally lower.
CME Globex Recap:Grain and oilseed markets were quietly mixed early Thursday morning as traders await the release of USDA's monthly Supply and Demand and Crop Production reports at noon (ET). Outside commodities were mostly higher despite a rally in the U.S. dollar index. Gold remains supported by tension between the United States and North Korea. This same factor has global equities under pressure for a second consecutive day.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 36.64 points (0.2%) lower at 22,048.70, the NASDAQ Composite lost 18.13 points (0.3%) to 6,352.33, and the S&P 500 dipped 0.90 to 2,474.02 Wednesday. DJIA futures were 44 points lower early Thursday morning. Asian markets closed lower with Japan's Nikkei down 8.97 points, Hong Kong's Hang Seng losing 313.09 points (1.1%), and China's Shanghai Composite down 13.82 points (0.4%). European markets were trading lower with London's FTSE 100 off 80.53 points (1.1%), Germany's DAX off 86.80 points (0.7%), and France's CAC 40 losing 16.15 points (0.3%). The euro was 0.0048 lower at 1.1711 while the U.S. dollar index gained 0.26 to 93.76. September 30-year T-Bonds were 2/32 lower at 154'21 while December gold added $5.50 to $1,284.80. Crude oil was $0.23 higher at $49.79 while Brent crude gained $0.40 to $53.10. China's Dalian soybean and Malaysian palm oil futures were both higher again overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | USDA is expected to reduce its new-crop corn yield, production, and ending stocks estimates in the August round of reports. | 1) | It's possible USDA could increase its old-crop ending stocks estimate. |
| 2) | Old-crop domestic soybean ending stocks are expected to be trimmed in USDA's reports Thursday. | 2) | Keep an eye out for more old-crop soybean sales cancelations. |
| 3) | USDA's spring wheat production estimate is expected to be trimmed Thursday. | 3) | The long-term view of wheat supply and demand remains bearish. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Technically, December corn looks to be in position for a rally to close out the week with the short-term trend on its daily chart still up. The contract is sitting just above initial resistance at $3.85 early Thursday morning, with the 4-day high at $3.88 3/4. Beyond that short-term resistance is pegged at $3.91 1/4 and $3.96 1/4. Fundamentally, Thursday should be all about USDA's Supply and Demand and Crop Production reports. Taking center stage, though not necessarily the most important number, will be USDA's change in its national average yield estimate. The average pre-report estimate came in at 166 bushels per acre, as compared to trendline calculations of 170.7 bpa. Something else to watch will be old-crop demand and subsequent possible changes to 2016-2017 ending stocks that become 2017-2018 beginning stocks.
SOYBEANS The November soybean contract remains in a minor (short-term) uptrend on its daily chart heading into Thursday's round of USDA reports. The contract moved above initial technical resistance at $9.76 1/4 overnight, sitting near its 4-day high of $9.79 3/4. Once that's cleared the target becomes $9.90, then 10.01. All these could be in reach Thursday depending on how bullish USDA's Supply and Demand numbers are viewed. In soybeans, the key could be old-crop ending stocks that are expected to decrease. As with corn, national average yield is also expected to be trimmed slightly, though the September Crop Production report could be more telling. The market's vulnerability is, of course, a set of bearish numbers that could lead to a retest of support near $9.53 1/4. Delivery of 39 contracts was reported against the August issue, putting the total at 2,802 contracts.
WHEAT Winter wheat contracts were showing small losses early Thursday morning with pressure tied to the rally by the U.S. dollar index overnight. The December Chicago contract remains in an interest short-term technical position, having built a base near $4.81 1/4 over the last five trading sessions. This has the contract tentatively holding near support on its daily chart at $4.87 1/4 while momentum indicators put the Chicago wheat in a sharply oversold technical situation. All those would suggest the market could rally after the release of USDA's August Supply and Demand and Crop Production reports, with the most likely spark coming from reduced overall production. With winter wheat out of the question, the most likely candidate for this change is spring wheat. There is also the possibility that USDA's increases its demand estimate, reducing expected ending stocks.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.32 | $0.03 | -$0.40 | Sep | $0.005 |
| Soybeans: | $9.07 | $0.01 | -$0.67 | Nov | $0.007 |
| SRW Wheat: | $4.30 | $0.02 | -$0.30 | Sep | -$0.002 |
| HRW Wheat: | $3.96 | $0.03 | -$0.68 | Sep | -$0.001 |
| HRS Wheat: | $6.90 | $0.03 | -$0.44 | Sep | $0.004 |
Darin Newsom can be reached at darin.newsom@dtn.com
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