DTN Early Word Grains
Some Gotta Win, Some Gotta Lose
December corn was 2 cents lower, November soybeans were 2 cents lower, and December Chicago (SRW) wheat was 1 cent lower.
CME Globex Recap:Commodities in general were lower early Tuesday morning, possibly pressured by residual selling tied to Monday's strong rally by the U.S. dollar index. The grain and oilseed complex was quiet overnight, as one would expect, ahead of Tuesday's round of USDA monthly Crop Production and Supply and Demand reports set for release at 11 am (CT).
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 259.58 points (1.2%) higher at 22,057.37, the NASDAQ Composite gained 72.07 points (1.1%) to 6,432.26, and the S&P 500 rallied 26.68 points (1.1%) to 2,488.11 Monday. DJIA futures were 38 points higher early Tuesday morning. Asian markets closed higher with Japan's Nikkei up 230.85 points (1.2%), Hong Kong's Hang Seng rallying 17.11 points, and China's Shanghai Composite adding 3.07 points (0.1%). European markets were trading mostly higher with London's FTSE 100 off 12.33 points (0.2%), Germany's DAX gaining 70.17 points (0.6%), and France's CAC 40 rallying 25.72 points (0.5%). The euro gained 0.0009 to 1.1962 while the U.S. dollar index dipped 0.05 to 91.85. December 30-year T-Bonds were 13/32 lower at 155'19 while December gold lost $5.00 to $1,330.70. Crude oil was $0.21 lower at $47.86 while Brent crude lost $0.12 to $53.72. China's Dalian soybean futures were slightly higher and Malaysian palm oil futures were higher overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | If corn sees a bullish crop production number turn up on the Keno board, the market could extend its short-term uptrend. | 1) | If corn sees a bearish crop production number turn up on the Keno board, the market could test contract lows. |
| 2) | If soybeans see a bullish crop production number turn up on the Keno board, Wave 5 of its short-term 5-wave uptrend would begin. | 2) | If soybeans see a bullish crop production number turn up on the Keno board, Wave 4 of the 5-wave short-term uptrend could extend. |
| 3) | If by chance a slightly bullish domestic ending stocks number for wheat shows up on the Keno board, contracts could hold above recent lows. | 3) | If a bearish domestic stocks number for wheat shows up on the Keno board, new contracts lows should be expected. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN December corn continues to consolidate below initial resistance at $3.61 1/2. Tuesday's Keno game, also known as USDA's monthly Crop Production report, will decide whether the next move is for the contract to extend its short-term uptrend to near $3.80 or fall back to test its low of $3.44 1/4. The fate of corn farmers everywhere depends on the announcing of one arbitrary, still variable, number: USDA's total production estimate for September. Recall that this group's August guess came in at 14.153 billion bushels, so the market will react to an increase or decrease from this starting point. And while an actual, real, production number is still months away, September's guess is expected to generate a reaction. There were no new deliveries reported against the September issue, leaving the total at 2,879 contracts.
SOYBEANS Regardless of the outcome of Tuesday's monthly "Luck 'O the Draw" game, also known as USDA's monthly Crop Production report, technical analysts will be able to argue November soybeans short-term daily chart foretold the future. If USDA unveils a randomly selected production number below its August guess of 4.381 billion bushels, November soybeans should rally beyond the recent high of $9.77 1/2. Technical analysts will cite the sell-off from that high through Monday's low (at least) of $9.56 3/4 was Wave 4 of a 5-wave uptrend, and nearly a 50% retracement of Wave 3. On the other hand, if USDA's September guess comes in above its August estimate and November soybeans fall, the same technical analysts will argue Wave 4 is still active. And all that still makes more sense than what fundamental analysts will argue about following the release of USDA's September reports. There were no new deliveries reported against the September issue, leaving the total at 249 contracts.
WHEAT Maybe the most bullish aspect of December Chicago (and Kansas City) wheat is its proximity to its contract low heading into Tuesday's round of Supply and Demand reports. Perhaps traders will find some nugget of an imaginary number worth buying, based on the idea the contract doesn't need to see a new low. At least not today. It's possible that nugget of an imaginary number could be a slightly lower domestic ending stocks figure, if the average pre-report guess of 920 mb is anywhere close to right. In August, USDA drew 933 mb out of the hat for 2017-2018 domestic ending stocks. Other than that, there isn't expected to be much for traders to get excited about. Sticking with the day's theme, think of wheat as the $1 Keno game as compared to the $100, "high stakes", variety being played in corn and soybeans Tuesday. Delivery of 7 contracts was reported against the September Chicago issue, putting its total at 312 contracts. Delivery of 42 contracts were reported against the September Kansas City issue, putting its total at 1,157 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.13 | $0.01 | -$0.45 | Dec | $0.005 |
| Soybeans: | $8.95 | -$0.03 | -$0.65 | Nov | -$0.006 |
| SRW Wheat: | $3.89 | -$0.05 | -$0.46 | Dec | -$0.017 |
| HRW Wheat: | $3.52 | -$0.06 | -$0.83 | Dec | $0.006 |
| HRS Wheat: | $5.92 | -$0.03 | -$0.51 | Dec | $0.011 |
Darin Newsom can be reached at darin.newsom@dtn.com
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