DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 3 cents lower, November soybeans were 5 cents lower, and December Chicago (SRW) wheat was 2 cents lower.

CME Globex Recap:

Anticipation for Monday's celestial phenomenon didn't change the mood in grain and oilseed markets overnight, with pressure seen from the opening bell through early Monday morning. Traders still seem to be watching the rains form over parts of the western Corn Belt, possibly to the benefit of soybean crops in the area. Additional pressure could be tied to opening round of talks toward renegotiating NAFTA that were described as "tense". Outside markets were mixed with softs mostly higher, metals higher, and energies mostly lower. The U.S. dollar index held its small gain overnight while DJIA futures fell back on pressure from overseas equity markets.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 76.22 points (0.4%) lower at 21,674.51, the NASDAQ Composite lost 5.39 points (0.1%) to 6,216.53, and the S&P 500 fell 4.46 points (0.2%) to 2,425.55 Friday. DJIA futures were 11 points lower early Monday morning. Asian markets closed mixed with Japan's down 77.28 points (0.4%), Hong Kong's Hang Seng rallying 107.11 points (0.4%) and China's Shanghai Composite adding 18.18 points (0.6%). European markets were trading lower with London's FTSE 100 down 12.53 points (0.2%), Germany's DAX losing 43.73 points (0.4%), and France's CAC 40 off 21.08 points (0.4%). The euro was 0.0017 lower at 1.1744 while the U.S. dollar index added 0.09 to 93.51. December 30-year T-Bonds were 8/32 higher at 154'28 while December gold added $1.10 to $1,292.70. Crude oil was $0.10 higher at $48.61 while Brent crude slipped $0.13 to $52.59. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.

	BULL		BEAR
1)	Both old-crop September and new-crop December corn are testing contract lows.	1)	If both old-crop and new-crop corn post new contract lows, it could trigger another round of noncommercial selling.
2)	Recent commercial buying in old-crop soybeans has lifted the September contract to near par (pricewise) with new-crop November.	2)	Rains continue to fall over parts of the U.S. Midwest soybean growing area Monday morning.
3)	The December-to-March Minneapolis wheat spread is showing a continued bullish commercial outlook.	3)	Just about every factor imaginable is somehow bearish for winter wheat.

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 It's just another Masa Monday Morning in corn, as the market continues to grind lower (Get it? Ground corn? I know, it's early.). Anyway, old-crop September traded within a penny of its contract low of $3.48 1/4 overnight while new-crop December is within a nickel of its low of a $3.58 1/2. The latter saw overnight trade volume (futures only) come in near 13,000 contracts once again. Both contracts are oversold on daily and weekly charts, a technical factor that has yet to spark renewed buying interest. One reason why is the increasingly bearish commercial view of supply and demand, indicated through futures spreads, with the carry in the December-to-March covering roughly 69% of calculated full commercial carry.

SOYBEANS Welcome to another Meal Monday Morning as soybeans continue to processed into lower prices (Okay, that was a bit of a stretch.). Despite minor (short-term) technical signals indicating both futures and cash are trying to turn up, soybeans started the overnight session under pressure and were still in the red early Monday morning. However, it remains to be seen if commercial buying reappears this week and if so, will it be enough to generate renewed noncommercial buying. Last week saw old-crop September pull even with new-crop November, pricewise, before backing off a bit on low volume overnight. Last week's spread action could be an indicator of continued strength in export demand, with initial numbers seen in Monday's weekly Export Inspection report.

WHEAT It's just another Monday morning in wheat. No pithy play on words necessary. Wheat is just lower, with renewed commercial selling expected to be seen before the day is through. Yes, both new-crop July 2018 Chicago and Kansas City are sharply oversold on short-term daily charts and yes, old-crop Minneapolis spring wheat continues to show a bullish commercial outlook starting with the December-to-March futures spread, but none of those factors seem to draw continued buying interest into the complex. Part of the problem could be the ongoing strength of the U.S. dollar index, helping to put pressure on currencies of key global competitors. Also, some rain has been seen over parts of the winter wheat growing areas the last couple weeks possibly improving planting conditions later this fall.

	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	$0.005
Soybeans:	$8.76	$0.05	-$0.62	Nov	$0.006
SRW Wheat:	$3.88	$0.02	-$0.28	Sep	-$0.002
HRW Wheat:	$3.47	$0.00	-$0.67	Sep	$0.001
HRS Wheat:	$6.27	-$0.02	-$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.