DTN Early Word Grains
Just Another Day
December corn was 1 cent lower, November soybeans were 6 cents lower, and December Chicago (SRW) wheat was 1 cent lower.
CME Globex Recap:The global grain and oilseed complex was lower overnight with the early Thursday morning quote screen showing red for U.S. markets, canola, Malaysian palm oil, and China's Dalian soybeans and corn. Outside commodities fared little better with cotton under pressure again, energies mixed, and gold posting a small loss. The U.S. dollar index and DJIA futures were both taking a breather following Wednesday's higher session.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 56.39 points (0.2%) higher at 22,340.71, the NASDAQ Composite gained 73.10 points (1.1%) to 6,453.26, and the S&P 500 rallied 10.20 points (0.4%) to 2,507.04 Wednesday. DJIA futures were 10 points lower early Thursday morning. Asian markets closed mixed with Japan's Nikkei up 96.06 points (0.5%), Hong Kong's Hang Seng down 220.83 points (0.8%), and China's Shanghai Composite off 5.63 points (0.2%). European markets were trading higher with London's FTSE 100 up 2.47 points, Germany's DAX gaining 39.93 points (0.3%), and France's CAC 40 adding 8.19 points (0.1%). The euro was 0.0023 higher at 1.1767 while the U.S. dollar index dipped 0.09 to 93.36. December 30-year T-Bonds were 25/32 lower at 152'05 while December gold slipped $1.50 to $1,286.30. Crude oil was $0.54 higher at $52.68 while Brent crude gained $0.40 to $58.30. China's Dalian soybean and Malaysian palm oil futures were lower overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | A bullish nugget for corn...hmmm...Well, it's near contract lows with a bullish seasonal turn coming at the end of the first week of October. | 1) | Corn's fundamentals, based on the strong carry in its forward curve, remain bearish. |
| 2) | It would not be surprising to see another announcement of new export sales of U.S. soybeans. | 2) | The minor (short-term) downtrend in November soybeans is expected to continue. |
| 3) | Commercial buying has been providing support to the wheat complex of late | 3) | December Chicago wheat tested initial technical price resistance Wednesday, possibly triggering increased selling interest. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN It seems safe to say that corn doesn't like to move on days ending in "y". This being a Thursday (note the "y" on the end), it's unlikely thee market does much today. Overnight trade was quiet, again, with Dec corn posting a 1 1/4-cent trading range on volume (futures only) of 4,500 contracts. Meanwhile, Dec corn continues hug the midpoint of its range between the contract low of $3.44 1/4 and initial resistance of $3.61 1/2 like a sloth holding to the limb of a tree. Fundamentally there is little fresh news to provide the market direction with early yield data starting to roll in while piles of old-crop corn pop up across the U.S. Midwest. It's against this backdrop that the December-to-March futures spread continues to test the 13-cent carry level, reflecting a bearish view of supply and demand.
SOYBEANS November soybeans resumed the minor (short-term) downtrend on its daily chart that began with the combined Friday/Monday 2-day reversal. The contract slipped below first support at $9.61 3/44, a price that marks the 38.2% retracement level of the previous minor uptrend from $9.21 through last Friday's high of $9.87. The 50% retracement level is at $9.54 and 61.8% mark at $9.46 1/4. From a technical perspective this could provide targets for the contract if this Friday's Quarterly Stocks report is viewed as bearish. The average pre-report guess came in at 339 mb (for more information see DTN's Report Preview, "Big Numbers Could Be Really Big"), though the carry in the November-to-January spread is hinting at a larger number.
WHEAT Chicago December wheat rebounded Wednesday, erasing a lower start to test its initial technical target of $4.62 1/2 by the end of the day. This price marks the 23.6% retracement level of the contract's previous minor (short-term) downtrend and could lead to the end of the current minor uptrend. Daily stochastics (short-term momentum study) shows Dec Chicago in an overbought situation. However, the uptrend that began with the low of $4.22 1/2 was led by increased commercial buying indicated by a weakening carry in the December-to-March futures spread. While still bearish, it did hint at possible stronger short-term demand. It will be interesting to see how much selling, both cash and futures, was waiting on the contract to test this resistance level.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.09 | $0.02 | -$0.45 | Dec | $0.000 |
| Soybeans: | $8.90 | $0.02 | -$0.76 | Nov | -$0.004 |
| SRW Wheat: | $4.18 | $0.08 | -$0.44 | Dec | -$0.002 |
| HRW Wheat: | $3.82 | $0.07 | -$0.77 | Dec | $0.003 |
| HRS Wheat: | $6.01 | $0.03 | -$0.49 | Dec | -$0.007 |
Darin Newsom can be reached at darin.newsom@dtn.com
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