DTN Early Word Grains

Rain Makes Green

6:00 a.m. CME Globex:

December corn was 1 cent higher, November soybeans were 8 cents higher, and December Chicago (SRW) wheat was fractionally higher.

CME Globex Recap:

After another round of storms rolled across the western Midwest Wednesday, grain and oilseed markets were in the green overnight into Thursday morning. This despite another factor that tends to be bearish, a higher U.S. dollar index. In fact most commodity sectors were higher early Thursday with only energies under pressure. DJIA futures were also showing a small loss.

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OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 25.88 points (0.1%) higher at 22,024.87, the NASDAQ Composite gained 12.10 points (0.2%) to 6,345.11, and the S&P 500 added 3.50 points (0.1%) to 2,468.11 Wednesday. DJIA futures were 17 points lower early Thursday morning. Asian markets closed mixed with Japan's Nikkei down 26.65 points (0.1%), Hong Kong's Hang Seng falling 64.85 points (0.2%) and China's Shanghai Composite gaining 21.98 points (0.7%). European markets were trading mostly lower with London's FTSE 100 down 21.11 points (0.3%), Germany's DAX losing 19.20 points (0.1%), and France's CAC 40 off 4.11 points. The euro was 0.0066 lower at 1.1702 while the U.S. dollar index rallied 0.38 to 93.85. September 30-year T-Bonds were 9/32 lower at 154'25 while December gold added $7.70 to $1,290.60. Crude oil was $0.13 lower at $46.65 while Brent crude lost $0.07 to $50.20. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.

BULL BEAR
1) The most bullish aspect of corn could be that the market remains technically oversold. 1) Technically Dec corn still looks to have some room to the downside.
2) Recent basis activity would suggest soybeans won't see large scale cancelations in this week's sales and shipment numbers. 2) Rains over the U.S. Midwest this week could still weigh on soybeans as the weekend approaches.
3) Winter wheat contracts were showing small gains out of sympathy, with little other reason to be bullish. 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 COMMENTS

CORN From a technical point of view, December corn looks to be in a similar spot to where it was early Wednesday morning. Despite daily stochastics (short-term momentum study) showing the contract to be oversold, Wednesday saw the contract post a new low of $3.63 1/4 before stabilizing. Overnight trade volume (futures only) was light at 23,100 contracts as Dec corn posted a trading range of 1 1/2 cents. While it looks like the contract could try to build support heading toward the weekend, the risk is selling interest increasing as the day goes along. Support on the contract's weekly chart remains the previous low of $3.58 1/2 (week of August 29, 2016). Don't look for Thursday's weekly export shipment numbers (for the week ending Thursday, August 10) to provide much direction either way. Through the previous week's report, corn was on pace for total shipments of 2.214 bb.

SOYBEANS November soybeans posted a solid rally overnight, moving as much as 8 cents higher despite Wednesday's rains across the U.S. Midwest and a stronger U.S. dollar early Thursday morning. Technically, Nov beans look to be moving into a minor (short-term) uptrend after holding above its previous low of $9.07. A move to a new 4-day high beyond $9.46 1/2 would confirm this change in trend, though that looks a bit out of reach Thursday with the contract sitting near $9.33. Fundamentally, all eyes will be on Thursday morning's weekly Export Sales and Shipments report (for the week ending Thursday, August 10). Unshipped bushels through the previous report were sitting at 198.3 mb (5,397,300 mt), or down 2% from the previous year. Basis has held together relatively well the last couple weeks, added by a sell-off in the futures market, reducing the likelihood of cancellations in this week's report. Total shipments through August 10 implied a marketing year demand total of 2.099 bb.

WHEAT Winter wheat contracts were showing fractional gains early Thursday morning for no apparent reason. Given the strength of the U.S. dollar index and strengthening carry in the forward curve of both the Chicago and Kansas City markets, it seems unlikely either market should close higher Thursday. Rains have been seen recently across the U.S. Southern Plains and Midwest growing areas, setting the stage for better planting conditions this coming fall. Technically both markets are sharply oversold, though this factor has generated little noncommercial buying interest of late.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.14 -$0.02 -$0.38 Sep $0.004
Soybeans: $8.62 $0.02 -$0.63 Nov $0.006
SRW Wheat: $3.91 -$0.09 -$0.28 Sep $0.010
HRW Wheat: $3.52 -$0.07 -$0.68 Sep -$0.005
HRS Wheat: $6.31 $0.15 -$0.43 Sep -$0.004

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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