DTN Early Word Grains
Just Another Day
December corn was fractionally lower, November soybeans were 4 cents higher, and December Chicago (SRW) wheat was 2 cents higher.
CME Globex Recap:Despite generally bearish estimates from USDA in its September round of monthly Crop Production reports Tuesday, soybeans have climbed back to near pre-report price levels while corn has stabilized. Wheat closed higher Tuesday and saw light follow-through buying during the overnight session. Outside commodities were mostly higher, though cotton continued to see pressure from commercial selling. DJIA futures and the U.S. dollar index were both showing small losses early Wednesday morning.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 61.49 points (0.2%) higher at 22,118.86, the NASDAQ Composite gained 22.02 points (0.3%) to 6,454.28, and the S&P 500 rallied 8.37 points (0.3%) to 2,496.48 Tuesday. DJIA futures were 20 points lower early Wednesday morning. Asian markets closed mixed with Japan's Nikkei up 89.20 points (0.4%), Hong Kong's Hang Seng down 78.16 points (0.3%), and China's Shanghai Composite up 4.66 points (0.1%). European markets were trading mixed with London's FTSE 100 off 38.90 points (0.5%), Germany's DAX gaining 1.83 points, and France's CAC 40 adding 4.13 points. The euro gained 0.0003 to 1.1968 while the U.S. dollar index dipped 0.05 to 91.85. December 30-year T-Bonds were 7/32 higher at 155'15 while December gold rallied $4.00 to $1,336.70. Crude oil was $0.46 higher at $48.69 while Brent crude gained $0.33 to $54.60. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | December corn held its contract low during Tuesday's post-report sell-off, maintaining uptrends on both daily and weekly charts. | 1) | The corn markets' major (long-term) trends remains sideways-to-down. |
| 2) | Wave 5 of November soybeans 5-wave uptrend looks to be under way following Tuesday's sell-off (Wave 4) and recovery. | 2) | Nov soybeans Wave 5 could be limited by continued commercial selling, indicated by a stronger carry in the November-to-January futures spread. |
| 3) | Steady commercial buying continues to be indicated by the weakening carry of the December-to-March Chicago wheat spread. | 3) | Wheat's long-term forward curve continues to reflect a bearish supply and demand situation. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Technically, nothing has changed about the corn market. The long term trend for both futures and cash (NCI.X, DTN National Corn Index) remains sideways-to-down. Dec corn held its contract low of $3.44 1/4 during Tuesday's post-USDA report sell-off leaving its minor (short-term) and secondary (intermediate-term) uptrends intact. The market's forward curve (series of futures spreads) continues to cover a slightly bearish level of calculated full commercial carry, just as it did before the release of USDA'S numbers. So in the big picture, nothing has changed about corn with acres, yield, and total production remaining unknown until USDA's January report. Delivery of 375 contracts was reported against the September issue, putting the total at 3,254 contracts.
SOYBEANS November soybeans remain in a 5-wave minor (short-term) uptrend on its daily chart. Tuesday's post-USDA report sell-off was nothing more than an accelerated Wave 4 (retracement wave) that saw the contract close back above the peak of Wave 1 at $9.47 1/4 (Tuesday's close was $9.50 1/2). This sets the stage for Wave 5 to begin, meaning Nov beans would be expected to trade above the Wave 3 high of $9.77 1/2 in the near future. Overnight trade saw the contract quietly climb to $9.59 1/4, before pulling back to $9.54 through early Wednesday morning. There were no new deliveries reported against the September issue, leaving the total at 249 contracts.
WHEAT December Chicago wheat remains in a minor (short-term) uptrend on its daily chart, testing resistance at its previous short-term high of $4.46 3/4. From there the contract is expected to rally to $4.62 1/2. Light commercial buying could be seen as talk of weather issues in Australia have already started to surface. While the market's forward curve (series of futures spreads) continues to cover a bearish level of calculated full commercial carry, the December-to-March has seen its carry trimmed to "only" 20 cents as compared to a 23-cent carry the week of August 21. Delivery of 18 contracts was reported against the September Chicago issue, putting its total at 330 contracts. Delivery of 35 contracts were reported against the September Kansas City issue, putting its total at 1,192 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.07 | -$0.06 | -$0.45 | Dec | $0.000 |
| Soybeans: | $8.85 | -$0.10 | -$0.66 | Nov | -$0.007 |
| SRW Wheat: | $3.97 | $0.08 | -$0.45 | Dec | $0.009 |
| HRW Wheat: | $3.60 | $0.08 | -$0.82 | Dec | $0.009 |
| HRS Wheat: | $5.91 | -$0.01 | -$0.51 | Dec | $0.000 |
Darin Newsom can be reached at darin.newsom@dtn.com
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