DTN Early Word Grains
Seeing Red
December corn was 1 cent lower, November soybeans were 5 cents lower, and December Chicago (SRW) wheat was 3 cents lower.
CME Globex Recap:The grain and oilseed complex was under pressure early Monday morning as the U.S. dollar index rallied. Other commodities were mostly higher with only crude oil, copper and cocoa showing losses. Some of the pressure in corn and soybeans might have come from weekend harvest progress, and anecdotal reports of better-than-expected yields. Still, both markets had only erased about half of Friday's rally.
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The Dow Jones Industrial Average closed 9.64 points lower at 22,349.59, the NASDAQ Composite gained 4.23 points to 6,426.92, and the S&P 500 added 1.62 points to 2,502.22 Friday. DJIA futures were 12 points lower early Monday morning. Asian markets closed mostly lower with Japan's Nikkei up 101.13 points (0.5%), Hong Kong's Hang Seng off 380.19 points (1.4%) and China's Shanghai Composite down 10.98 points (0.3%). European markets were trading mostly lower with London's FTSE 100 down 21.06 points (0.3%), Germany's DAX up 13.71 points (0.2%), and France's CAC 40 off 14.02 points (0.3%). The euro was 0.0062 lower at 1.1885 while the U.S. dollar index rallied 0.31 to 92.45. December 30-year T-Bonds were 19/32 higher at 154'22 while December gold gained $1.50 to $1,299.00. Crude oil was $0.01 lower at $50.65 while Brent crude added $0.45 to $57.31. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower again overnight.
| BULL | BEAR | ||
| 1) | There is no obvious bullish nugget for corn early Monday morning. | 1) | Old-crop corn bushels coming to town, new-crop bushels being harvested, and a record large fourth quarter quarterly stocks number this Friday could weigh on the corn market this week. |
| 2) | Daily export sales announcements of soybeans reflects continued interest in U.S. supplies. | 2) | November soybeans could roll to a short-term downtrend Monday. |
| 3) | Much of the U.S. Southern Plains HRW wheat growing area remains in some form of drought, according to last week's Drought Monitor map. | 3) | The long-term commercial view of winter wheat remains bearish. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN December corn remains firmly entrenched in its trading range between $3.61 1/2 and its contract low of $3.44 1/4, continue to sit near the midpoint of this range at $3.52 Monday morning. Though trade volume (futures only) increased a little during Friday's rally, little follow-through activity was seen overnight as only 7,600 contracts of the December issue changed hands. It's possible the market is looking ahead to USDA's Quarterly Stocks report at the end of this week, but more likely traders are waiting for more conclusive harvest data to start rolling in.
SOYBEANS Friday's rally by November soybeans to a high of $9.87 took the contract into its minor (short-term) target range between $9.84 and $9.99. Meanwhile daily stochastics (short-term momentum study) crept into an overbought situation, setting the stage or a possible bearish turn if the contract stays under pressure during Monday's session. The bottom line is November soybeans could establish a sell signal, and move into a new short-term downtrend Monday if it stays under pressure throughout the day. If so, look for selling to be tied to early talk of better-than-expected harvest yields, though actual data is just beginning to be collected. Also, it's a strong possibility another round of announcements regarding new export sales could be seen this week.
WHEAT The wheat complex was lower early Monday morning, led by what looked to be renewed commercial selling in winter markets. Technically, the minor (short-term) uptrend by December Chicago looks to have run its course, coming up short of the targeted $4.62 1/2 mark. Still, as of Monday morning, the contract had not given a clear short-term sell signal. Fundamentally, there is little change in winter wheat following a weekend of hit-and-miss rains across parts of the U.S. Southern Plains. For now planting conditions remain mostly dry, according to last Thursday's Drought Monitor map. This coming Friday will not only see the release of USDA's Quarterly Stocks report, the end of the first quarter for wheat, but also the small grains summary finalizing the 2016-17 marketing year for wheat.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.08 | $0.03 | -$0.45 | Dec | -$0.007 |
| Soybeans: | $9.12 | $0.11 | -$0.73 | Nov | -$0.020 |
| SRW Wheat: | $4.06 | -$0.03 | -$0.43 | Dec | -$0.002 |
| HRW Wheat: | $3.70 | $0.01 | -$0.80 | Dec | $0.003 |
| HRS Wheat: | $5.85 | $0.10 | -$0.50 | Dec | -$0.002 |
Darin Newsom can be reached at darin.newsom@dtn.com
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