DTN Early Word Grains
Beans Still Jumping
December corn was 1 cent lower, November soybeans were 5 cents higher, and December Chicago (SRW) wheat was 1 cent lower.
CME Globex Recap:Chicago soybeans continued to rally overnight, once again supported by commercial buying interest. Corn and wheat took a breather, with contracts of both sitting quietly at session lows early Thursday morning. Softs were mostly lower, interesting in that both cotton and orange juice were showing losses despite Hurricane Irma still churning toward Florida. Gold was firm once again while the U.S. dollar index posted a solid sell-off.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
The Dow Jones Industrial Average closed 54.33 points (0.3%) higher at 21,807.65, the NASDAQ Composite gained 17.74 points (0.3%) to 6,393.31, and the S&P 500 rallied 7.69 points (0.3%) to 2,465.54 Wednesday. DJIA futures were 17 points lower early Thursday morning. Asian markets closed mostly lower with Japan's Nikkei up 38.55 points (0.2%), Hong Kong's Hang Seng off 90.84 points (0.3%), and China's Shanghai Composite down 19.89 points (0.6%). European markets were trading mostly higher with London's FTSE 100 up 18.36 points (0.3%), Germany's DAX adding 115.64 points (1.0%), and France's CAC 40 gaining 25.99 points (0.5%). The euro rallied 0.0006 to 1.1923 while the U.S. dollar index fell 0.34 to 91.89. December 30-year T-Bonds were 14/32 higher at 156'25 while December gold gained $5.10 to $1,344.10. Crude oil was $0.15 lower at $49.01 while Brent crude added $0.24 to $54.44. China's Dalian soybean futures were lower and Malaysian palm oil futures were higher overnight.
| BULL | BEAR | ||
| 1) | National average corn basis continues to firm. | 1) | The carry in the December-to-March corn spread continues to cover a bearish level of calculated full commercial carry. |
| 2) | November soybeans are showing uptrends on both its daily and weekly charts. | 2) | November soybeans are nearing a short-term overbought situation. |
| 3) | Noncommercial short-covering continues to support Chicago wheat. | 3) | The long-term commercial outlook for winter wheat 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 December corn's minor (short-term) trend remains up with the contract testing initial resistance at $3.61 1/2 on its daily chart. This price marks the 23.6% retracement level of the previous downtrend from $4.17 1/4 through the low of $3.44 1/4. It's interesting to note that despite this week's rally in the futures market, albeit small, national average basis has also firmed from last Friday's calculation of 47 1/4 cents under (DTN National Corn Index minus the Dec futures contract) to 46 cents under Wednesday evening. While old-crop bushels are making their way to town ahead of harvest, demand remains strong. And merchandisers are probably dialing in a later than normal start to harvest, sourcing needed bushels ahead of time. Technically, both Dec futures and the NCI.X are nearing the establishment of bullish signals indicating turns to secondary (intermediate-term) uptrends on weekly charts. Delivery of 195 contracts was reported against the September issue, putting the total at 2,810 contracts.
SOYBEANS The uptrends on November soybeans daily and weekly charts continue to strengthen with the contract fast approaching minor (short-term) resistance at $9.84. This price marks the 50% retracement level of the previous downtrend from $10.47 through the low of $9.21. Daily stochastics (short-term momentum study) shows the contract to be overbought, a possible trigger for increased selling interest heading into the weekend. Some of this pressure could come from commercial traders, with national average basis (DTN National Soybean Index minus November futures) weakening by about 1 cent this week while the carry in the November-to-January futures spread sits on the border between neutral-to-bearish and bearish. Delivery of 145 contracts was reported against the September issue, putting the total at 220 contracts.
WHEAT Despite the slight downturn Thursday morning the minor (short-term) trend remains up for December Chicago wheat. The mountain wheat has to climb is the same as it always is: The overwhelmingly bearish market fundamentals indicated by strong carry in the forward curves. This week has seen open interest in the Dec Chicago issue fall from 269,257 contracts (Friday, September 1) to 264,289 contracts (Wednesday, September 6), indicating most of the buying interest has been noncommercial short-covering. And while this group likely has a ways to go to bring their net-short futures position back to par, the strong carry in the Chicago forward curve should lead to another round of selling at some point in the future. Delivery of 18 contracts was reported against the September Chicago issue, putting its total at 161 contracts. Delivery of 204 contracts was reported against the September Kansas City issue, putting its total at 1,108 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.15 | $0.03 | -$0.46 | Dec | $0.006 |
| Soybeans: | $9.07 | $0.03 | -$0.64 | Nov | $0.006 |
| SRW Wheat: | $4.00 | $0.02 | -$0.45 | Dec | -$0.004 |
| HRW Wheat: | $3.65 | $0.05 | -$0.84 | Dec | $0.010 |
| HRS Wheat: | $5.93 | $0.14 | -$0.52 | Dec | -$0.010 |
Darin Newsom can be reached at darin.newsom@dtn.com
Darin can be followed throughout the day at www.twitter.com\DarinNewsom
(BAS)
Copyright 2017 DTN/The Progressive Farmer. All rights reserved.