DTN Early Word Grains

A Mixed Bag to Start Report Week

6:00 a.m. CME Globex:

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

CME Globex Recap:

The grain and oilseed complex wasn't as much mixed as it was mostly lower early Monday with corn, wheat, bean meal, and bean oil all fading during the overnight session. Soybeans continued to show a small gain on light support from increased concern over crop damage after Hurricane Irma made landfall on the western side of Florida. Outside markets were also mostly lower with the hardest hit being cotton. Gold was lower and energies were mixed as the U.S. dollar index posted a small rally and DJIA futures showed a strong triple-digit gain.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 13.01 points higher at 21,797.79, the NASDAQ Composite lost 37.68 points (0.6%) to 6,360.19, and the S&P 500 dipped 3.67 points (0.1%) to 2,461.43 Friday. DJIA futures were 120 points higher early Monday morning. Asian markets closed higher with Japan's Nikkei up 270.95 points (1.4%), Hong Kong's Hang Seng rallying 286.66 points (1.0%), and China's Shanghai Composite gaining 11.18 points (0.3%). European markets were trading higher with London's FTSE 100 up 53.01 points (0.7%), Germany's DAX gaining 139.28 points (1.1%), and France's CAC 40 rallying 64.06 points (1.2%). The euro fell 0.0016 to 1.2020 while the U.S. dollar index added 0.13 to 91.46. December 30-year T-Bonds were 14/32 lower at 156'27 while December gold lost $8.50 to $1,342.70. Crude oil was $0.26 higher at $47.74 while Brent crude lost $0.29 to $53.49. China's Dalian soybean futures were lower and Malaysian palm oil futures were higher overnight.

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BULL BEAR
1) December corn remains in a short-term uptrend, and could soon break out of its consolidation pattern. 1) The carry in the December-to-March corn spread continues to cover a bearish level of calculated full commercial carry.
2)

The remnants of Hurricane Irma could lead right through the southeastern U.S. soybean growing area.

2)

The short-term trend of November soybeans looks to be entering Wave 4 (of 5), meaning a downward partial retracement of the recently concluded Wave 3.

3) Winter wheat contracts continue to hold above their lows. 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 COMMENTS

CORN After posting a bullish technical signal on its weekly chart last week (for more information see this past weekend's Technically Speaking blog update on DTN), December corn stumbled overnight. Trade volume was light, as expected with USDA's next round of Crop Production and Supply and Demand report set for release Tuesday (noon ET). Dec corn's short-term daily chart continues to show consolidation below initial minor (short-term) resistance at $3.61 1/2, leaving the door open for either buyers or sellers following Tuesday's USDA numbers. Support remains at the low of $3.44 1/4 with next resistance between $3.72 and $3.80 3/4. Fundamentally, there is no fresh news expected Monday morning with most waiting for harvest data to start rolling in. Delivery of 2 contracts was reported against the September issue, putting the total at 2,879 contracts.

SOYBEANS November soybeans were showing a small gain early Monday morning, though already a nickel off its overnight high. Technically the contract still looks to be in a 5-wave minor (short-term) uptrend with last week's peak between resistance levels of $9.69 and $9.84 looking like the top of Wave 3. If so, Wave 4 could be triggered by a more bearish than expected set of USDA Crop Production and Supply and Demand reports set for release Tuesday (noon ET). However, any resulting sell-off isn't expected to move below the Wave 1 high of $9.50 1/2. Fundamentally, the next round of actual news for soybeans will be the September 29 Quarterly Stocks report (stocks on hand as of September 1). This will be the de-facto ending stocks number for the 2016-2017 marketing year and therefore beginning stocks for the 2017-2018 marketing year. There were no new deliveries reported against the September issue, leaving the total at 249 contracts.

WHEAT Winter wheat markets were lower to start the week, with December contracts of both Chicago and Kansas City working back toward their respective lows of $4.22 1/2 and $4.20. For now there is no fundamental reason for traders to change their bearish opinion of supply and demand, with the Chicago December-to-March futures spread showing a carry of 21 1/4 cents and the same spread in Kansas City a spread of 17 1/2 cents. Traders will soon turn their attention to new-crop, possibly after the release of the September 29 Annual Small Grains Summary report. Delivery of 44 contracts was reported against the September Chicago issue, putting its total at 305 contracts. Delivery of 7 contracts were reported against the September Kansas City issue, putting its total at 1,115 contracts.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.11 $0.02 -$0.45 Dec $0.000
Soybeans: $8.98 -$0.07 -$0.64 Nov $0.001
SRW Wheat: $3.93 $0.01 -$0.45 Dec $0.008
HRW Wheat: $3.58 $0.00 -$0.83 Dec $0.005
HRS Wheat: $5.95 -$0.03 -$0.52 Dec $0.003

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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