DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 4 cents lower, November soybeans were 9 cents lower, and September Chicago (SRW) wheat was 6 cents lower.

CME Globex Recap:

Ag markets in general were lower Monday morning with strongest losses seen in soybeans and Minneapolis spring wheat. Corn, winter wheat, and cotton were also under pressure with most contracts near session lows. Outside commodities fared little better with metals lower and energies mostly lower. The U.S. dollar index was stronger, as was DJIA futures that seemed to relax a bit after tensions with North Korea took a backseat to fighting at home this past weekend.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 14.31 points higher at 21,858.32, the NASDAQ Composite added 39.68 points (0.6%) to 6,256.56, and the S&P 500 gained 3.11 points (0.1%) to 2,441.32 Friday. DJIA futures were 89 points higher early Monday morning. Asian markets closed mostly higher with Japan's Nikkei down 192.64 points (1.0%), Hong Kong's Hang Seng gaining 366.72 points (1.3%) and China's Shanghai Composite rallying 28.82 points (0.9%). European markets were trading higher with London's FTSE 100 up 40.54 points (0.5%), Germany's DAX up 127.48 points (1.0%), and France's CAC 40 up 44.77 points (0.9%). The euro was 0.0021 lower at 1.1801 while the U.S. dollar index gained 0.24 to 93.31. September 30-year T-Bonds were 13/32 lower at 155'02 while December gold dropped $7.10 to $1,286.10. Crude oil was $0.22 lower at $48.60 while Brent crude lost $0.29 to $51.81. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	The most bullish aspect of corn could be that the market is technically oversold. But don't look for that to bring buyers back soon.	1)	Commercial selling could reemerge in the corn market Monday.
2)	Weather maps show the past seven days was dry across much of the U.S. Midwest soybean growing area.	2)	Given old-crop soybean sales are running ahead of projection the market remains vulnerable to headlines of cancelations.
3)	Winter wheat contracts are testing lows overnight into early Monday morning.	3)	The long-term view of wheat supply and demand remains extremely bearish.

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 traded lower overnight with contracts sitting near session lows early Monday morning. New-crop December posted a low of $3.70, a solid test of support on its weekly chart near $3.70 1/2. If this mark doesn't hold look for the contract to continue to slide back to its previous low of $3.58 1/2. For now there continues to be few bullish factors, technically or fundamentally, to bring buyers back to the market. The closest thing to a bullish technical signal could be that Dec corn has moved to a secondary (intermediate-term) oversold situation as it tests support. Whether or not this will be enough to turn the market around remains to be seen.

SOYBEANS November soybeans started Sunday's overnight session with a double-digit, 10-cent loss and sat there still as Monday morning began. This puts the contract below short-term technical support at $9.40, bringing secondary (intermediate-term) support between $9.19 and $9.00 3/4 back into play. The fate of soybeans could well rest in the hands of commercial traders, meaning futures spreads will once again be a key factor. For now, though, it looks like November soybeans want to continue to push lower on noncommercial selling tied to last week's bearish news. Delivery of 98 contracts was reported against the August issue, putting the total at 2,905 contracts.

WHEAT Strong selling was seen across the wheat complex, with increased commercial interest in spring wheat driving the Minneapolis market to sharp double-digit losses. Given the pressure there and in other Chicago markets, both SRW and HRW wheat had little chance of doing anything but go down. September Chicago (SRW) was testing its contract low of $4.30 3/4 with an overnight move to $3.31 1/2 while September Kansas City was sitting about 4 cents above its contract low of $4.28. Both could see new lows set once Monday's session gets going in earnest.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.21	$0.03	-$0.40	Sep	-$0.002
Soybeans:	$8.79	$0.05	-$0.66	Nov	$0.004
SRW Wheat:	$4.09	-$0.01	-$0.30	Sep	$0.001
HRW Wheat:	$3.74	-$0.07	-$0.67	Sep	$0.001
HRS Wheat:	$6.31	-$0.29	-$0.43	Sep	$0.005

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

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