DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was fractionally higher, November soybeans were 3-cents higher, and December Chicago (SRW) wheat was 1 cent higher.

CME Globex Recap:

Trade in grain and oilseed markets overnight, while mostly to the upside, was like watching paint dry. Corn posted less than a 2-cent range, wheat moved less than 3 cents, and soybeans couldn't establish a 6-cent range through early Wednesday morning. Outside markets were mostly higher, with light pressure in both DJIA futures and the U.S. dollar index ahead of the conclusion of the Federal Reserve's 2-day meeting and subsequent announcements Wednesday afternoon.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 39.45 points (0.2%) higher at 22,370.80, the NASDAQ Composite gained 6.68 points (0.1%) to 6,461.32, and the S&P 500 gained 2.78 points (0.1%) to 2,506.65 Tuesday. DJIA futures were 2 points lower early Wednesday morning. Asian markets closed mostly higher with Japan's Nikkei up 11.08 points, Hong Kong's Hang Seng gained 76.39 points (0.3%), and China's Shanghai Composite added 9.15 points (0.3%). European markets were trading mixed with London's FTSE 100 up 0.78 point, Germany's DAX down 6.21 points, and France's CAC 40 gaining 6.63 points (0.1%). The euro was 0.0013 higher at 1.2007 while the U.S. dollar index slipped 0.16 to 91.68. December 30-year T-Bonds were 8/32 higher at 154'12 while December gold added $8.20 to $1,318.80. Crude oil was $0.54 higher at $50.02 while Brent crude gained $0.49 to $55.63. China's Dalian soybean futures were lower and Malaysian palm oil futures were mostly higher overnight.

	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)	After taking a day off (Tuesday) soybeans could see new export sales announced Wednesday.	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 contracts could try to build on light overnight buying interest early Wednesday.	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 When one thinks corn can't get any quieter, it does. The overnight session saw Dec corn post a 1 3/4-cent trading on trade volume (futures only) of 5,500 contracts. Meanwhile, the Dec issue has slowly been eroding back toward its contract low of $3.44 1/4, hitting a low of $3.46 1/2 Tuesday before rallying slightly. Fundamentally there is no change in the market, with old-crop bushels coming to town and new-crop harvest slowly getting under way. Basis has been softening, most notably at the Gulf (reportedly). Technically Dec corn remains locked in a minor (short-term) downtrend between its contract low and resistance at $3.61 1/2.

SOYBEANS Soybeans were able to rally again overnight, similar to what was seen both Monday and Tuesday morning. Still, the November contract has been unable to take out the minor (short-term) double-top near $9.77 on its daily chart. Daily stochastics (short-term momentum study) indicate the contract is nearing an overbought situation, a technical factor that could trigger increased selling interest. Fundamentally there is little fresh news for the market to get excited about, with Tuesday's seeing an end to the string of seven consecutive days of export sales announcements from USDA. While the carry in the November-to-January futures spread was trimmed slightly overnight, recent action has seen carry strengthen to 10 1/4 cents and covering a bearish 72% of calculated full commercial carry.

WHEAT Winter wheat contracts were showing small gains again early Wednesday, with both Chicago (SRW) and Kansas City (HRW) 1 to 2 cents higher. Technically, the December Chicago would still be classified as being in a minor (short-term) uptrend, though unable to break through a string of recent highs near $4.50. Meanwhile, daily stochastics (short-term momentum study) show the contract to be nearing an overbought situation. Fundamentally winter wheat remains bearish with strong carry seen in the forward curves of both Chicago and Kansas City. Wednesday's session could see both markets try to trade higher early, though unlikely to build overwhelming bullish momentum.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.04	-$0.03	-$0.45	Dec	$0.006
Soybeans:	$8.96	-$0.02	-$0.70	Nov	-$0.002
SRW Wheat:	$4.00	$0.01	-$0.43	Dec	$0.013
HRW Wheat:	$3.61	$0.00	-$0.81	Dec	$0.002
HRS Wheat:	$5.67	-$0.05	-$0.50	Dec	$0.002

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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