DTN Early Word Grains
Double-Day Wednesday
December corn was unchanged, November soybeans were 2 cents higher, and December Chicago (SRW) wheat was 3 cents higher.
CME Globex Recap:Tuesday's late attempt at a rally in grain and oilseeds led to light buying interest overnight, led by none other than the wheat complex. There is was Minneapolis spring wheat doing most of the work, posting a strong double-digit rally through early Wednesday morning. Outside markets were mostly higher with softs showing gains, energies mixed, and metals mostly lower. The U.S. dollar index was trading quietly higher once again while DJIA futures showed another solid rally.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 5.28 points higher at 21,998.99, the NASDAQ Composite lost 7.22 points (0.1%) to 6,333.01, and the S&P 500 dipped 1.23 points to 2,464.61 Tuesday. DJIA futures were 57 points higher early Wednesday morning. Asian markets closed mostly higher with Japan's Nikkei down 24.03 points (0.1%), Hong Kong's Hang Seng gaining 234.11 points (0.9%) and China's Shanghai Composite dipping 4.81 points (0.1%). European markets were trading higher with London's FTSE 100 up 45.85 points (0.6%), Germany's DAX up 99.87 points (0.8%), and France's CAC 40 up 51.44 points (1.0%). The euro was 0.0007 lower at 1.1729 while the U.S. dollar index gained 0.04 to 93.87. September 30-year T-Bonds were 17/32 lower at 153'28 while December gold dropped $4.30 to $1,275.40. Crude oil was $0.34 higher at $47.89 while Brent crude gained $0.45 to $51.25. China's Dalian soybean futures were lower and Malaysian palm oil futures were mixed overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | The most bullish aspect of corn could be that the market remains technically oversold. | 1) | Commercial selling could continue in the corn market Wednesday. |
| 2) | Light commercial buying continues to be seen in soybeans. | 2) | November soybeans look like a test of the previous low of $9.07 is in its not too distant future. |
| 3) | Winter wheat contracts were higher on what could be little more than sympathy spillover interest from spring wheat. | 3) | According to its futures spreads, the long-term view of winter 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 COMMENTSCORN This week has seen the December corn contract move below support on its weekly chart at $3.70 1/2, opening the door to a possible test of its previous low of $3.58 1/2. On the bullish side, technically, both daily (short-term) and weekly (intermediate-term) stochastics (momentum study) are showing an oversold situation. Though this has done little to generate buying enthusiasm of late, it is still a possibility. On the bearish side of the ledger remains the carry in the December-to-March futures spread of almost 12 cents. This covers approximately 68% of calculated full commercial carry, with anything at or above roughly 67% considered bearish. Early Wednesday morning saw light buying interest, though this could quickly evaporate if wheat and soybean markets start to falter.
SOYBEANS This week's sell-off has seen November soybeans move toward a test of its previous low of $9.07 with the contract posting a low of $9.22 overnight. Near constant pressure since last Thursday's meltdown has dropped daily stochastics (short-term momentum study) into single-digits reflecting a sharply oversold market. The first group to show some buying interest has been commercial traders, trimming the carry in the November-to-January futures spread this week by a 1/2 cent to 8 1/2 cents early Wednesday. This covers roughly 59% of calculated full commercial carry, putting it in the neutral category. While contracts were able to rally overnight, it would not be surprising to see bearish weather forecasts put the market under pressure once again Wednesday.
WHEAT Tuesday saw December Chicago (SRW) post a new contract low of $4.54 1/4 despite its daily stochastics (short-term) momentum study trolling along in single-digits (sharply oversold) since July 26. This week has seen renewed noncommercial selling as this group continues to add to their recently established net-short futures position. Given the extremely bearish commercial view of fundamentals reflected in the strong carry of both the September-to-December and December-to-March futures spreads, noncommercial traders aren't likely to turn bullish anytime soon. Buying interest in winter wheat came from the sharp double-digit rally in Minneapolis spring wheat. It would not be surprising to see this move by spring wheat run out of momentum during Wednesday's session.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.16 | -$0.07 | -$0.39 | Sep | $0.005 |
| Soybeans: | $8.60 | -$0.12 | -$0.64 | Nov | $0.017 |
| SRW Wheat: | $4.00 | -$0.11 | -$0.29 | Sep | $0.005 |
| HRW Wheat: | $3.59 | -$0.10 | -$0.67 | Sep | $0.007 |
| HRS Wheat: | $6.16 | -$0.12 | -$0.42 | Sep | $0.002 |
Darin Newsom can be reached at darin.newsom@dtn.com
Darin can be followed throughout the day at www.twitter.com\DarinNewsom
(KA)
Copyright 2017 DTN/The Progressive Farmer. All rights reserved.