DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was fractionally lower, November soybeans were 2 cents higher, and December Chicago (SRW) wheat was 2 cents lower.

CME Globex Recap:

Grains and oilseed markets traded either side of unchanged overnight with corn and wheat back in the red early Monday while soybeans stayed higher. Outside markets (softs, energies, metals) were mixed while the U.S. dollar index posted a small gain and DJIA futures showed solid strength.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 64.86 points (0.3%) higher at 22,268.34, the NASDAQ Composite gained 19.38 points (0.3%) to 6,448.47, and the S&P 500 gained 4.61 points (0.2%) to 2,500.23 Friday. DJIA futures were 59 points higher early Monday morning. Asian markets closed higher with Japan's Nikkei closed for holiday, Hong Kong's Hang Seng gaining 352.18 points (1.3%), and China's Shanghai Composite up 9.24 points (0.3%). European markets were trading mostly higher with London's FTSE 100 up 23.77 points (0.3%), Germany's DAX gaining 72.11 points (0.6%), and France's CAC 40 rallying 23.35 points (0.5%). The U.S. dollar index gained 0.06 to 91.91. December 30-year T-Bonds were 4/32 lower at 154'29 while December gold lost $7.10 to $1,318.10. Crude oil was $0.03 higher at $49.92 while Brent crude gained $0.08 to $55.70. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

	BULL		BEAR
1)	An upside breakout still seems the more likely short-term path for the December corn contract.	1)	The corn markets' major (long-term) trends remains sideways-to-down.
2)	November soybeans still look to extend this short-term uptrend to near $10.00.	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)	Winter wheat has seen the return of commercial buying over recent weeks.	3)	Wheat's long-term forward curve continues to reflect a bearish supply and demand situation.

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 Sooner or later, December corn will break out of the ongoing consolidation pattern on its daily chart. For now the contract continues to move sideways between its low of $3.44 1/4 and initial resistance at $3.61 1/2. A bullish breakout would suggest the minor (short-term) trend could extend to near $3.80 with a bearish breakdown the less likely of the two outcomes. Fundamentally there is little fresh news in the market, with traders waiting on harvest yield numbers to start rolling in. Some rain was seen over parts of the western Corn Belt over the weekend, possibly slowing early combine work in those areas.

SOYBEANS November soybeans continue to struggle extending the minor (short-term) uptrend on its daily chart. Last Thursday saw the contract post a new high (for this move) of $9.78 1/4, with the upside target area still sitting between $9.84 and $9.99. Daily stochastics (short-term momentum study) are nearing the overbought level of 80%, possibly limiting new buying interest. A bearish factor for soybeans remains the short-term commercial outlook, with the carry in the November-to-January futures spread sitting near 10 1/4 cents and covering approximately 66% of calculated full commercial carry. However, if commercial buying emerges early this week it could be enough to move Nov beans to a new high.

WHEATWinter wheat contracts were lower, again, to start the week. The Chicago market was sitting at overnight session lows early Monday morning, with strengthening carry in futures spreads suggesting renewed commercial selling. While this could also be a product of low overnight trade volume, it would not be surprising to see continued pressure on spreads as Monday's session lengthens. Dec Chicago has struggled to find enough buying to hit the initial upside technical price target of $4.62 1/2, while daily stochastics (short-term momentum study) have already inched up to the overbought level of 80%. This combined with long-term bearish fundamentals could spark another round of selling this week.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.10	$0.00	-$0.45	Dec	-$0.005
Soybeans:	$9.00	-$0.09	-$0.68	Nov	-$0.015
SRW Wheat:	$4.06	$0.06	-$0.43	Dec	$0.003
HRW Wheat:	$3.65	$0.04	-$0.81	Dec	-$0.004
HRS Wheat:	$5.71	-$0.10	-$0.50	Dec	$0.008

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

(BAS)

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