DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

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

CME Globex Recap:

It goes without saying, after so many days, that the grain and oilseed complex was quiet overnight. As usual, corn barely moved, wheat was fractionally lower, and soybeans imitated corn. Other commodities didn't do much either, though gold was able to rally on a weaker U.S. dollar.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 84.07 points (0.4%) higher at 22,641.67, the NASDAQ Composite gained 15.00 points (0.2%) to 6,531.71, and the S&P 500 added 5.46 points (0.2%) to 2,534.58 Tuesday. DJIA futures were 6 points lower early Wednesday morning. Asian markets closed higher with Japan's Nikkei up 12.59 points and Hong Kong's Hang Seng gaining 205.97 points (0.7%). European markets were trading mixed with London's FTSE 100 off 3.67 points, Germany's DAX up 11.17 points (0.1%), and France's CAC 40 down 18.26 points (0.3%). The euro was 0.0024 higher at 1.1769 while the U.S. dollar index slipped 0.28 to 93.34. December 30-year T-Bonds were 11/32 higher at 152'31 while December gold gained $6.00 to $1,280.60. Crude oil was $0.22 lower at $50.20 while Brent crude fell $0.23 to $55.77. China's Dalian soybean market was closed while Malaysian palm oil futures were higher again overnight.

	BULL		BEAR
1)	December corn is testing short-term technical price support on its daily chart.	1)	A break of short-term trendline support by Dec corn could send it over the edge to a new contract low.
2)	After taking a day off, Tuesday, soybeans could see another announcement of new exports sales Wednesday.	2)	Commercial selling has been putting pressure on the soybean market of late.
3)	Tuesday saw the return of commercial buying to the Chicago (SRW) wheat market.	3)	The bottom line for wheat remains a long-term bearish commercial outlook indicated by the strong carry in Chicago's forward curve.

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 Think of the corn market as a "Convoy", with each contract following the lead of December, moving in a straight line. However, Dec corn has led this particular convoy into a narrowing tunnel that could result in the whole line edging off a cliff, or start climbing its way back up the mountain. Minor (short-term) trendline support is calculated Wednesday at $3.48 1/4, with Dec posting that as an overnight low. Of course the high was only $3.49 1/2 as trade volume (futures only) trickled in at only 8,500 contracts through early Wednesday morning. While not much is expected of the corn market today, Wednesday's can see expanded trading ranges due to low volume of trade and low volatility. Corn's volatility index (different from the market's DTN Six Factor study) is sitting at 16.5%, its lowest level since April 21.

SOYBEANS Soybeans continue to resemble a train, trying to pull a load (corn) up a steep mountain. Therefore, given the day, let's call the market "The Silverton". The overnight session saw Nov soybeans resemble Dec corn by posting a narrow 1 3/4-cent trading range ("So they set her on the narrow-gauge") on trade volume (futures only) of 6,000 contracts. November soybeans continue to hold above minor (short-term) technical price support at $9.54 while daily stochastics (short-term momentum indicator) work toward the oversold level of 20%. If the contract's short-term downtrend stalls out at this level, and trendline support would suggest it could, the 3-wave downtrend could be considered completed since this wave did post a new low Tuesday of $9.52 1/2.

WHEAT When one thinks of wheat, and C.W. McCall trucking songs, the first to come to mind is "Wolf Creek Pass". The story tells of a hair-raising ride across the Great Divide, hauling chickens, and losing brakes going down the other side. A look at the weekly Minneapolis spring wheat chart, the recent driver of the wheat complex (we'll call it "Earl"), and it looks similar to the ride described in the song. However, Dec Minneapolis wheat looks to have buying interest near technical support at $6.08, allowing renewed commercial buying interest to come back to the Chicago (SRW) market. Wednesday is expected to be a quiet session, but if the U.S. dollar index stays under pressure, light buying could continue to be seen in the wheat complex.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.04	-$0.02	-$0.46	Dec	$0.004
Soybeans:	$8.75	-$0.02	-$0.81	Nov	-$0.001
SRW Wheat:	$4.06	$0.03	-$0.42	Dec	-$0.003
HRW Wheat:	$3.65	$0.03	-$0.76	Dec	$0.007
HRS Wheat:	$5.69	-$0.01	-$0.43	Dec	-$0.022

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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