DTN Early Word Grains
Grains Trucking Higher Early Tuesday
December corn was 3 cents higher, November soybeans were 12 cents higher, and December Chicago (SRW) wheat was 6 cents higher.
CME Globex Recap:Commodity markets in general were higher early Tuesday morning, despite slight gains made by the U.S. dollar index. The grain and oilseed complex was led once again by commercial buying in soybeans, with noncommercial interest noted in corn. Weather across the U.S. Midwest was cool with no frost scare to start the holiday shortened week. RBOB gasoline futures were in the process of giving back some Harvey-related gains while increasing world tensions, most notably due to North Korea, had gold at its highest price in a year.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 39.46 points (0.2%) higher at 21,987.56, the NASDAQ Composite gained 6.67 points (0.1%) to 6,435.33, and the S&P 500 rallied 4.90 points (0.2%) to 2,476.55 Friday. DJIA futures were 47 points lower early Monday morning as North Korea reportedly contemplates another nuclear test. Asian markets closed mostly higher with Japan's Nikkei down 122.44 points (0.6%), Hong Kong's Hang Seng rallied 1.09 points, and China's Shanghai Composite adding 4.73 points (0.1%). European markets were trading higher with London's FTSE 100 up 16.75 points (0.2%), Germany's DAX gaining 100.29 points (0.8%), and France's CAC 40 adding 15.76 points (0.3%). The euro lost 0.0048 to 1.1862 while the U.S. dollar index gained 0.07 to 92.67. December 30-year T-Bonds were 1/32 higher at 155'07 while December gold rallied $6.20 to $1,336.60. Crude oil was $0.47 higher at $47.76 while Brent crude added $0.06 to $52.40. Malaysian palm oil futures were higher overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Noncommercial short-covering could provide support to Dec corn early this week. | 1) | The carry in the December-to-March corn spread continues to cover a bearish level of calculated full commercial carry. |
| 2) | November soybeans left a small bullish gap on its daily chart overnight. | 2) | November soybeans are testing trendline resistance on its daily chart. |
| 3) | December Chicago wheat has moved into a minor (short-term) uptrend on its daily chart. | 3) | The long-term commercial outlook for winter wheat remains extremely bearish. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn was posting a quiet rally early Tuesday morning, the December contract trying to build on recent signals showing a turn to a minor (short-term) uptrend. Initial support looks to be coming from noncommercial traders following Friday's CFTC Commitments of Traders report (legacy, futures only) that showed this group moving to a net-short futures position as of Tuesday, August 29. According to the December-to-March futures spread, fundamentals remain bearish as the 12 3/4-cent carry covers approximately 72% of calculated full commercial carry. Seasonally, September usually isn't kind to corn as the December contract tends to fall to a normal early October low. However, the degree of selling through August left the market oversold and in position for a short-term contra-seasonal rally as a new marketing year gets under way. Initial resistance on the contract's daily chart is at $3.61 1/2, then $3.72 1/4. Delivery of 724 contracts was reported against the September issue, putting the total at 2,400 contracts.
SOYBEANS November soybeans left a small bullish gap between Friday's high of $9.52 and the overnight low of $9.52 1/4. This while its minor (short-term) uptrend strengthened to the point of testing trendline resistance on its daily chart at $9.59 1/4 through early Tuesday morning. A push through this level could lead to an extended rally to between $9.69 and $9.84, prices that mark the 38.2% and 50% retracement levels of the previous downtrend from $10.47 through the low of $9.21. Support continues to come from commercial buying, keeping the carry in the November-to-January futures spread just below the bearish level of 66% calculated full commercial carry. Tuesday morning will see the release of the final export inspection figures for the 2016-2017 marketing year, setting the stage for Friday's final weekly Export Sales and Shipments report. There were no deliveries reported against the September issue, leaving the total at 2 contracts.
WHEAT Winter wheat markets were trading higher early Tuesday as recently established minor (short-term) uptrends gain momentum. While fundamentals remain bearish, as indicated by the strong carry in both Chicago and Kansas City December-to-March futures spreads, there is room for Dec contracts to rally on noncommercial short-covering. Friday's weekly CFTC Commitments of Traders report showed this group still holding a net-short futures position of 33,233 contracts in the more heavily traded Chicago market. There continues to be no deliveries reported against the September Chicago contract. Delivery of 196 contracts was reported against the September Kansas City issue, putting its total at 746 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.08 | $0.00 | -$0.47 | Dec | $0.026 |
| Soybeans: | $8.86 | $0.03 | -$0.64 | Nov | -$0.010 |
| SRW Wheat: | $3.93 | $0.07 | -$0.46 | Dec | $0.024 |
| HRW Wheat: | $3.51 | $0.05 | -$0.88 | Dec | $0.022 |
| HRS Wheat: | $5.79 | -$0.07 | -$0.53 | Dec | $0.013 |
Darin Newsom can be reached at darin.newsom@dtn.com
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