DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was fractionally lower, November soybeans were fractionally lower, and December Minneapolis (HRS) wheat was 3 cents higher.

CME Globex Recap:

Following Thursday's solid rally by soybeans, providing spillover support to corn, follow-through buying might have been expected overnight. And while soybeans did trade higher early, almost 2 cents, by the time Friday morning rolled around most of the grain and oilseed complex was showing small losses. Outside commodities were also in the red with light selling seen in cotton, crude oil, and gold. Financial markets were quiet, waiting for the release of September jobs data Friday morning.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 113.75 points (0.5%) higher at 22,775.39, the NASDAQ Composite gained 50.73 points (0.8%) to 6,585.36, and the S&P 500 added 14.33 points (0.6%) to 2,552.07 Thursday. DJIA futures were 11 points lower early Friday morning. Asian markets closed higher with Japan's Nikkei up 62.15 points (0.3%) and Hong Kong's Hang Seng up 78.86 points (0.3%). European markets were trading mostly mixed with London's FTSE 100 up 13.15 points (0.1%), Germany's DAX gaining 8.41 points, and France's CAC 40 off 9.53 points (0.2%). The euro was 0.0004 lower at 1.1707 while the U.S. dollar index added 0.11 to 94.03. December 30-year T-Bonds were 6/32 lower at 152'02 while December gold lost $1.90 to $1,271.30. Crude oil was $0.40 lower at $50.39 while Brent crude dipped $0.22 to $56.78. China's Dalian soybean market was closed while Malaysian palm oil futures were higher again overnight.

	BULL		BEAR
1)	The possibility of continued rain over parts of the U.S. Midwest, slowing harvest, could provide light support to corn Friday.	1)	December corn seems destined to test its contract low of $3.44 1/4.
2)	November soybeans could try to build on Thursday's rally, possibly leading to a bullish turn on its daily chart.	2)	The short-term commercial outlook for soybeans remains bearish, indicated by the strong carry in the November-to-January futures spread.
3)	December Minneapolis wheat remains in position to replace its recent downtrend with a new uptrend on weekly charts.	3)	Winter wheat contracts remain in short-term downtrends on their respective daily charts.

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 went nowhere fast overnight, posting a 1 3/4-cent trading range on trade volume (futures only) of 4,500 contracts. Meanwhile, Dec corn remains in the shadow of its contract low of $3.44 1/4 with its initial upside resistance of $3.61 1/2 seemingly far away in the distance. Friday's session is expected to be tentative, first waiting to see what, if any, reaction traders have to the release of September nonfarm payroll and unemployment rate numbers in the morning and how weekend forecast maps shape up. Regarding the latter, if rains dominate the U.S. Midwest corn could find support, then trade the actual event Monday.

SOYBEANS While Thursday's double-digit rally was impressive in soybeans, from a technical point of view it didn't break the Nov contract out of its minor (short-term) downtrend. After bouncing off support at $9.54 the contract tested trendline resistance at $9.67 1/4. Friday's session has short-term resistance now at the 4-day high of $9.71 (Thursday's high) and trendline at $9.65. Early overnight trade saw the contract touch $9.70 before falling back to $9.66 1/2. Fundamentally the situation is similar to corn, with traders keeping an eye on weekend weather maps regarding potential harvest progress and chances of rain. This could put light pressure on soybeans Friday, before buyers step back in overnight into Monday.

WHEAT The wheat complex was mostly higher early Friday, once again led by Minneapolis spring wheat. There the December contract seems intent on bringing an end to the secondary (intermediate-term) sideways trend on its weekly chart as it continues to hold above support at $6.08. The key could be whether or not the tide of commercial selling can be stemmed, with this group's increasing bearishness indicated by the strengthening carry in futures spreads. As for winter wheat, December Chicago was sitting near unchanged while December Kansas City was fractionally higher early Friday morning. Both remain in minor (short-term) downtrends on daily charts and could see increased selling interest, particularly if the U.S. dollar index has a bullish reaction to the release of September nonfarm payroll and unemployment numbers.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.04	$0.01	-$0.45	Dec	$0.000
Soybeans:	$8.88	$0.10	-$0.80	Nov	-$0.003
SRW Wheat:	$3.99	-$0.02	-$0.42	Dec	-$0.007
HRW Wheat:	$3.57	-$0.02	-$0.77	Dec	-$0.004
HRS Wheat:	$5.72	$0.05	-$0.44	Dec	-$0.008

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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