DTN Early Word Grains

Everything is Green Again

6:00 a.m. CME Globex:

December corn was 1 cent higher, November soybeans were 8 cents higher, and December Chicago (SRW) wheat was 1 cent higher.

CME Globex Recap:

The grain and oilseed complex was showing green across the board early Friday morning, supported in part by renewed weakness of the U.S. dollar. Energies were mixed, with natural gas stabilizing following Thursday's sharp sell-off, and metals were mostly higher led by a rejuvenated gold market. DJIA futures were lower, pressured by Asian equities after North Korea threatened a test of another hydrogen bomb over the Pacific Ocean.

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OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 53.36 points (0.2%) lower at 22,359.23, the NASDAQ Composite lost 33.35 points (0.5%) to 6,422.69, and the S&P 500 fell 7.64 points (0.3%) to 2,500.60 Thursday. DJIA futures were 25 points lower early Friday morning. Asian markets closed lower with Japan's Nikkei down 51.03 points (0.2%), Hong Kong's Hang Seng off 229.80 points (0.8%), and China's Shanghai Composite down 5.28 points (0.1%). European markets were trading mostly higher with London's FTSE 100 up 6.49 points (0.1%), Germany's DAX gaining 32.33 points (0.3%), and France's CAC 40 rallying 27.12 points (0.5%). The euro was 0.0043 higher at 1.1984 while the U.S. dollar index lost 0.23 to 91.95. December 30-year T-Bonds were 16/32 higher at 154'12 while December gold gained $5.00 to $1,299.80. Crude oil was $0.02 lower at $50.53 while Brent crude added $0.03 to $56.46. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower overnight.

BULL BEAR
1) Look for corn to find spillover support from the rallies in soybeans and wheat. 1) The commercial view of corn remains bearish, with another early harvest weekend ahead.
2) November soybeans finally extended its short-term uptrend, and could now look to build bullish momentum. 2) November soybeans daily stochastics (technical study) show the contract to be in an overbought situation.
3) Winter wheat markets remain in short-term uptrends. 3) The long-term commercial view of winter wheat remains bearish.

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 December corn was actually showing signs of life early Friday morning, posting an overnight trading range of almost 3 cents on still light volume (futures only) of 6,300 contracts. December corn continues to hold above its contract low of $3.44 1/4 but unable to make much of a move toward resistance at $3.61 1/2. Fundamentally, there isn't much fresh news heading toward the weekend, though harvest is expected to gain momentum. While this tends to put pressure on a market, corn is also near its seasonal low timeframe of early October. Both futures and cash markets show this as a key turning point of the new marketing year.

SOYBEANS November soybeans were finally able to extend the minor (short-term) uptrend on its daily chart beyond the previous high of $9.77 1/2. This opens the door for Wave 5 (of 5 wave) to test the target area of $9.84 to $9.99. These prices mark the 50% and 61.8% retracement levels of the previous downtrend from $10.47 through the low of $9.21. Meanwhile, daily stochastics (short-term momentum indicator) is showing the contract to have moved into an overbought situation. This doesn't mean selling will be seen immediately, but could limit new buying interest. Fundamentally, commercial buying has been seen of late, decreasing the carry in the November-to-January futures spread slightly. While still at a bearish level of calculated full commercial carry, the slight weakening has been tied to the string of daily announcements of new export sales. Contracts were sitting near overnight session highs early Friday morning.

WHEAT The wheat complex, winter wheat markets and spring wheat futures, was showing gains early Friday. Support was tied to the weaker U.S. dollar, though trade volume in the Chicago (SRW) market was relatively light at 5,400 contracts. Technically, December Chicago wheat remains in a minor (short-term) uptrend on its daily chart with a target price of $4.62 1/2, the 23.6% retracement level of the previous downtrend from $5.92 1/4 through the low of $4.22 1/2. Fundamentally, there hasn't been much change in the market, with weakening carry in winter wheat futures spreads still leaving forward curves at bearish levels of calculated full commercial carry.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.06 $0.00 -$0.44 Dec -$0.002
Soybeans: $9.00 $0.00 -$0.71 Nov -$0.008
SRW Wheat: $4.10 $0.04 -$0.43 Dec $0.010
HRW Wheat: $3.69 $0.01 -$0.80 Dec -$0.001
HRS Wheat: $5.74 $0.03 -$0.50 Dec $0.004

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

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

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