DTN Early Word Grains
It's Tuesday, So That Must Mean Turnaround
December corn was 1 cent higher, November soybeans were fractionally higher, and December Chicago (SRW) wheat was 2 cents higher.
CME Globex Recap:Early Tuesday morning sees most commodity markets that were under pressure Monday posting small gains. Corn and soybeans were fractionally higher while wheat had rallied a couple cents. Gold and silver were slightly higher, nowhere near erasing the previous session's losses. Energies were higher and softs mixed, with cotton still struggling to find renewed buying interest.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 63.01 points (0.3%) higher at 22,331.35, the NASDAQ Composite gained 6.17 points (0.1%) to 6,454.64, and the S&P 500 gained 3.64 points (0.2%) to 2,503.87 Monday. DJIA futures were 22 points higher early Tuesday morning. Asian markets closed mostly lower with Japan's Nikkei up 389.88 points (2.0%) as it made up for the previous day's holiday, Hong Kong's Hang Seng lost 108.36 points (0.4%), and China's Shanghai Composite dipped 6.01 points (0.2). European markets were trading mixed with London's FTSE 100 up 14.74 points (0.2%), Germany's DAX down 12.49 points (0.1%), and France's CAC 40 rallying 4.64 points (0.1%). The euro was 0.0032 higher at 1.1985 and the U.S. dollar index dipped 0.13 to 91.90. December 30-year T-Bonds were 6/32 higher at 154'17 while December gold added $1.20 to $1,312.00. Crude oil was $0.40 higher at $50.31 while Brent crude gained $0.23 to $55.71. China's Dalian soybean futures were mixed and Malaysian palm oil futures were lower overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Despite the lack of enthusiasm, December corn remains in a minor (short-term) uptrend. | 1) | The corn markets' major (long-term) trends remains sideways-to-down. |
| 2) | Announcements of new export sales of soybeans are being made almost daily. | 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) | Tuesday could see winter wheat contracts erase some, or most, of Monday's losses. | 3) | Wheat's long-term forward curve continues to reflect a bearish supply and demand situation. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Monday was another day of consolidation by December corn as the contract continues to hold between support at its low of $3.44 1/4 and initial minor (short-term) technical resistance at $3.61 1/2. While the minor trend remains up, based on previous signals on its daily chart, the contract is struggling to find any news to spark a rally. Leftover old-crop bushels are finding their way to town while the 2017 harvest slowly starts to make progress. This combination is expected to put pressure on basis, the December-to-March futures spread, and the December futures contract itself. Overnight trade volume (futures only) was quiet at only 9,100 contracts. In fact, excluding last Tuesday's report skewed spike, trade volume has been in decline during the month of September. With the next report, the September 29 Quarterly Stocks report, barely on the horizon, trade volume isn't expected to jump any time soon.
SOYBEANS November soybeans were fractionally higher early Tuesday, though like corn trade volume (futures only) was low at only 9,300 contracts. Nov beans continue to find selling interest near the $9.77 level as its daily chart starts to show the formation of a minor (short-term) topping pattern. Still, new export sales announcements from USDA are seen almost daily, though this has not provided the spark to push the contract to its targeted area between $9.84 and $9.99. Meanwhile the carry in the November-to-January futures spread continues to strengthen, sitting at 10 1/2 cents early Tuesday morning. This covers an increasingly bearish 70% of calculated full commercial carry.
WHEAT Winter wheat contracts were showing small gains early Tuesday, erasing some (in the case of Chicago) or all (Kansas City) of Monday's losses. The minor (short-term) uptrend in Chicago December looks to be nearing an end with the top at a series of highs near $4.50. If the contract decides to roll over, support is at the contract low of $4.22 1/2. The market remains fundamentally bearish with the carry in the December-to-March Chicago futures spread strengthening to 20 1/4 cents Monday. New-crop July-to-September is showing a carry of 14 cents. Tuesday's session could see the markets try to trade higher, but unlikely to generate much bullish enthusiasm.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.06 | -$0.03 | -$0.45 | Dec | $0.001 |
| Soybeans: | $8.98 | -$0.02 | -$0.69 | Nov | -$0.010 |
| SRW Wheat: | $3.99 | -$0.07 | -$0.45 | Dec | -$0.018 |
| HRW Wheat: | $3.61 | -$0.04 | -$0.81 | Dec | $0.002 |
| HRS Wheat: | $5.72 | $0.00 | -$0.51 | Dec | -$0.004 |
Darin Newsom can be reached at darin.newsom@dtn.com
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