DTN Early Word Grains
Another Quiet Early Morning
December corn was 1 cent lower, November soybeans were unchanged, and December Chicago (SRW) wheat was fractionally higher.
CME Globex Recap:Grain and oilseed markets weren't showing much change from Monday's close early Tuesday morning, with markets generally in the red once again. Two exceptions were bean oil and canola, both following Malaysian palm oil higher overnight. Other commodity sectors were mostly lower with gold, crude oil, and cotton all showing minor losses.
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The Dow Jones Industrial Average closed 53.50 points (0.2%) lower at 22,296.09, the NASDAQ Composite lost 56.33 points (0.9%) to 6,370.59, and the S&P 500 slipped 5.56 points (0.2%) to 2,496.66 Monday. DJIA futures were 7 points higher early Tuesday morning. Asian markets closed mixed with Japan's Nikkei down 67.39 points (0.3%), Hong Kong's Hang Seng gaining 12.67 points, and China's Shanghai Composite up 2.03 points. European markets were trading mixed with London's FTSE 100 down 6.59 points, Germany's DAX up 27.29 points (0.2%), and France's CAC 40 gaining 3.12 points. The euro was 0.0034 lower at 1.1816 while the U.S. dollar index rallied 0.20 to 92.86. December 30-year T-Bonds were 1/32 higher at 154'30 while December gold dipped $3.00 to $1,308.50. Crude oil was $0.27 lower at $51.95 while Brent crude lost $0.46 to $58.56. China's Dalian soybean and Malaysian palm oil futures were higher overnight.
| BULL | BEAR | ||
| 1) | Corn markets (cash and futures) continue to hold above recent low. | 1) | Corn markets (cash and futures) continue to hold below recent highs. |
| 2) | November soybeans did not establish a clear, technical top to its short-term uptrend Monday. | 2) | November soybeans look to have established a two-day reversal on its daily chart. |
| 3) | Winter wheat could still be considered in a short-term uptrend on daily charts. | 3) | Much of the U.S. Southern Plains winter wheat (HRW) growing area saw some rain Monday. |
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 COMMENTSCORN Corn continues to consolidate. Until further notice, that could be the only comment necessary to describe the corn markets. It doesn't matter if we are discussing the December 2017 contract, the DTN National Corn Index (NCI.X, national average cash price), or next year's December 2018 contract the chart patterns are the same. Even the fundamental reads of basis (national average) and futures spreads are moving sideways, with the former holding near the 45-cent under level and the latter (the December-to-March spread) continuing to sit at a carry between 12 cents and 13 cents. It seems corn is waiting on something (Godot?), most likely more harvest data to come rolling in from combines. Also, Friday's quarterly stocks number from USDA, the de-facto ending stocks figure for 2016-2017, is expected to be record large.
SOYBEANS With little else to do, technical analysts could spend the early morning hours debating November soybeans' daily chart. At first glance, Monday's sell-off looks to have put a top on the contract's minor (short-term) uptrend with the peak being Friday's high of $9.87. Note that this was within the targeted range of $9.84 to $9.99, prices that mark the 50% and 61.8% retracement levels of the previous downtrend from $10.47 through the low of $9.21. However, while daily stochastics posted a bearish crossover with Tuesday's sell-off, it occurred below the overbought level of 80%. This is usually an indication of a sideways move rather than a rollover from an uptrend to a downtrend. Except for the two-day reversal that appeared on the contract's daily bar chart. Friday's close of $9.84 1/4 was near its new high (for this uptrend) before Monday's close of $9.71 1/4 came within a tick of the session low of $9.71. Perhaps Tuesday's session will settle things, but that seems unlikely.
WHEAT Winter wheat contracts were fractionally mixed early Tuesday morning following a quietly traded overnight session. Technically, December Chicago wheat remains overbought on its short-term daily chart, a factor that could spark renewed selling interest. On the other hand, the contract continues to sit below its initial short-term technical target of $4.62 1/2, posting a high of $4.52 1/4 overnight. Of course there is always the bearish fundamentals to consider with the carry in the December-to-March Chicago spread sitting at roughly 19 cents. All in all, it looks to be more of the same in wheat Tuesday, with a small rally possible and always under the threat of renewed selling interest.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.09 | $0.00 | -$0.45 | Dec | -$0.001 |
| Soybeans: | $8.97 | -$0.15 | -$0.74 | Nov | -$0.017 |
| SRW Wheat: | $4.11 | $0.04 | -$0.43 | Dec | -$0.002 |
| HRW Wheat: | $3.76 | $0.05 | -$0.78 | Dec | $0.017 |
| HRS Wheat: | $5.99 | $0.14 | -$0.50 | Dec | $0.001 |
Darin Newsom can be reached at darin.newsom@dtn.com
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