DTN Early Word Grains
Welcome to the Second Monday of the Week
December corn was fractionally lower, November soybeans were 3 cents higher, and December Chicago (SRW) wheat was 1 cent lower.
CME Globex Recap:The grain and oilseed complex was mixed overnight. Grains were mostly lower with only Minneapolis spring wheat showing gains early Tuesday morning. Global oilseeds were mixed with Dalian and Chicago soybeans, and soybean meal all higher while Malaysian palm oil, Chicago bean oil, and Canadian canola all lower. Other commodities were mostly higher as the U.S. dollar index lost more than 0.40 overnight.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 12.60 points lower at 22,761.07, the NASDAQ Composite lost 10.45 points (0.1%) to 6,579.73, and the S&P 500 slipped 4.60 points (0.2%) to 2,544.73 Monday. DJIA futures were 34 points higher early Tuesday morning. Asian markets closed higher with Japan's Nikkei up 132.80 points (0.6%), Hong Kong's Hang Seng gaining 164.24 points (0.6%), and China's Shanghai Composite adding 8.61 points (0.3%). European markets were trading mostly lower with London's FTSE 100 up 7.64 points (0.1%), Germany's DAX down 21.06 points (0.1%) and France's CAC 40 off 5.55 points (0.1%). The euro was 0.0064 higher at 1.1806 while the U.S. dollar index fell 0.43 to 92.29. December 30-year T-Bonds were 5/32 higher at 152'08 while December gold rallied $8.60 to $1,293.60. Crude oil was $0.40 higher at $49.98 while Brent crude gained $0.43 to $56.22. China's Dalian soybean market was higher and Malaysian palm oil futures were lower overnight.
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| 1) | Morning weather maps continue to show rain over much of the U.S. Midwest, slowing corn harvest even further. | 1) | December corn seems destined to test its contract low of $3.44 1/4. |
| 2) | Despite Monday's lower close, November soybeans look to be gaining bullish momentum. | 2) | Commercial selling, indicated by stronger carry in futures spreads, continues to pressure soybeans. |
| 3) | The lower U.S. dollar index could bring renewed buying interest to the wheat complex. | 3) | For now, winter wheat contracts remain in minor (short-term) downtrends on 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 COMMENTSCORN If you like low volatility, low volume, and narrow price range trading have I got a market for you. Look no further than corn, December corn to be specific, with trade volume (futures only) overnight of only 5,600 contracts, its daily volatility index (different from market volatility) near 17% the lowest since last April, and showing a 1 1/4-cent trading range overnight through early Tuesday morning. A look at Dec corn's daily chart shows a continued narrowing consolidation between trendlines that are within 1 1/2 cents of each other Tuesday (high-side = $3.50 1/2, low-side = $3.49). It's interesting to note that these two trendlines meet at $3.49 1/2 on Thursday, October 12, the day of the next set of monthly USDA Crop Production and Supply and Demand reports.
SOYBEANS The soybean market rallied overnight, erasing most of Monday's late sell-off. November soybeans still look to be gaining short-term bullish momentum on its daily chart, with the initial target Monday's high of $9.77. Beyond that, targeted prices remain $9.84 and $9.99. To get to this range, soybeans will need to find increased support from the commercial side of the market. Recently, commercial traders have been putting pressure on soybeans, indicated by the strengthening carry in both the November-to-January and January-to-March futures spreads. However, the market has reached the point in its marketing year, early October, when both futures and cash post a seasonal low and start to work higher. This is based on a 4-year study taking into account the last four record large crops.
WHEAT The wheat complex was split again early Tuesday morning with winter markets lower and the December Minneapolis spring wheat market higher. The December Chicago contract remains in a minor (short-term) downtrend on its daily chart, a move that could soon come to an end. As the contract continues to hold above its previous low of $4.22 1/2, daily stochastics (short-term momentum study) have moved below the oversold level of 20%. This increases the likelihood that momentum could start to swing the other way, a more bullish way, allowing Dec Chicago to restart the recent secondary (intermediate-term) uptrend on its weekly chart. At some point Tuesday the wheat complex in general could find support from the lower U..S dollar index.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.05 | -$0.01 | -$0.45 | Dec | $0.000 |
| Soybeans: | $8.88 | -$0.05 | -$0.78 | Nov | $0.002 |
| SRW Wheat: | $3.96 | -$0.08 | -$0.40 | Dec | -$0.001 |
| HRW Wheat: | $3.54 | -$0.06 | -$0.77 | Dec | -$0.002 |
| HRS Wheat: | $5.81 | $0.00 | -$0.43 | Dec | $0.006 |
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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