DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 1 cent higher, November soybeans were 4 cents higher, and December Chicago (SRW) wheat was 1 cent higher.

CME Globex Recap:

Markets are back normal early Tuesday morning with no celestial happening to distract from the business at hand. Grain and oilseed markets were posting small gains after trading lower initially during the overnight session. Softs were mostly lower with cotton the bullish holdout. Energies were mostly higher as natural gas once again played the role of contrarian. Metals were mixed. Meanwhile, the U.S. dollar was stronger prompting a solid rally by the U.S. dollar index.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 29.24 points (0.1%) higher at 21,703.75, the NASDAQ Composite lost 3.40 points to 6,213.13, and the S&P 500 gained 2.82 points (0.1%) to 2,428.37 Monday. DJIA futures were 38 points higher early Tuesday morning. Asian markets closed mostly with Japan's Nikkei down 9.29 points, Hong Kong's Hang Seng rallying 246.99 points (0.9%) and China's Shanghai Composite adding 3.23 points (0.1%). European markets were trading higher with London's FTSE 100 up 51.76 points (0.77%), Germany's DAX adding 84.38 points (0.7%), and France's CAC 40 gaining 27.81 points (0.6%). The euro was 0.0061 lower at 1.1755 while the U.S. dollar index gained 0.44 to 93.52. December 30-year T-Bonds were 8/32 lower at 154'22 while December gold lost $5.90 to $1,290.90. Crude oil was $0.10 higher at $47.477 while Brent crude added $0.20 to $51.86. China's Dalian soybean and Malaysian palm oil futures were both higher again overnight.

	BULL		BEAR
1)	Monday's sell-off led to a quiet corn rally overnight into early Tuesday morning.	1)	Old-crop September corn fell to a new contract low during Monday's sell-off.
2)	The minor (short-term) uptrend in new-crop November soybeans looks to be building momentum.	2)	A stronger U.S. dollar could limit buying interest in soybeans Tuesday.
3)	The December-to-March Minneapolis wheat spread is showing a continued bullish commercial outlook.	3)	New-crop July 2018 Kansas City wheat posted a new contract low during Monday's session.

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 possible new-crop December corn could be trying to establish a minor (short-term) uptrend as it holds above its contract low of $3.58 1/2. Overnight trade volume (futures only) was relatively light at 22,000 contracts through early Tuesday morning, still Dec corn was holding a small gain. There is very little fresh fundamental news to turn this big ship around, with ideas actual crop yields could be smaller than the latest "official" guess already priced into the market. Traders seem to be waiting on "true" data off the combine once harvest starts. For now the market seems comfortable with new-crop supply and demand, as indicated by the bearish carry in the December-to-March futures spread. Therefore if a short-term uptrend is established it would have to come from a round of noncommercial buying.

SOYBEANS Monday's session was most notable for the weakness of the old-crop September contract versus new-crop November. After spending most of last week gaining ground on the latter, the former abruptly lost almost 4 cents through the close. This could be indicating that lasts week move generated some selling of old-crop cash soybeans, enough for merchandisers to take the foot off the pedal a bit this week. Still, most of the attention remains on the new-crop November contract that looks to be in a minor (short-term) uptrend on its daily chart while holding secondary (intermediate-term) support on its weekly chart. The contract posted a new 4-day high overnight, a short-term bullish signal. Though initial minor resistance is pegged at $9.50 3/4, the contract could be expected to extend this short-term rally to the $9.69 to $9.84 area.

WHEAT Monday saw winter wheat markets hammered again, leading to a slight recovery rally overnight into early Tuesday morning. The key to both SRW (Chicago) and HRW (Kansas City) markets is oppressively bearish fundamentals indicated by strong carry in forward curves for both. This combined with still weak basis has some counties in central Kansas showing prices below the government loan price of $2.94. In other words, Loan Deficiency Payments (LDPs) have come back into play. Meanwhile July 2018 Kansas City wheat moved to a new contract low of $4.84 1/4 during Monday's session.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.12	-$0.02	-$0.37	Sep	$0.006
Soybeans:	$8.75	-$0.01	-$0.62	Nov	$0.000
SRW Wheat:	$3.80	-$0.07	-$0.29	Sep	-$0.009
HRW Wheat:	$3.41	-$0.07	-$0.67	Sep	$0.002
HRS Wheat:	$6.14	-$0.12	-$0.41	Sep	$0.015

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

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

(KA)

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