DTN Early Word Grains
It Don't Mean a Thing if the Grains are Showing Green
December corn was fractionally higher, November soybeans were 3 cents higher, and December Chicago (SRW) wheat was 1 cent higher.
CME Globex Recap:The grain and oilseed complex was in the green early Thursday morning, largely due to lower closes across the board Wednesday. Markets are expected to come to life, if only briefly, after the release of USDA's October round of Crop Production and Supply and Demand reports at 11 am (CT) Thursday. Other commodities were mixed with cotton in the same boat as grains and oilseeds, softs mixed, energies mostly lower, and metals higher.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 42.21 points (0.2%) higher at 22,872.89, the NASDAQ Composite gained 16.30 points (0.2%) to 6,603.55, and the S&P 500 added 4.60 points (0.2%) to 2,555.24 Wednesday. DJIA futures were 7 points lower early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei up 73.45 points (0.3%), Hong Kong's Hang Seng gaining 69.46 points (0.2%), and China's Shanghai Composite down 2.18 points. European markets were trading mostly higher with London's FTSE 100 up 7.45 points (0.1%)), Germany's DAX adding 3.16 points, and France's CAC 40 down 6.01 points (0.1%). The euro was 0.0006 lower at 1.1853 while the U.S. dollar index gained 0.07 to 93.02. December 30-year T-Bonds were 1/32 higher at 152'19 while December gold rallied $7.90 to $1,296.80. Crude oil was $0.47 lower at 50.83 while Brent crude lost $0.29 to $56.65. China's Dalian soybean market was lower and Malaysian palm oil futures were higher overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | It's possible USDA's October round of Crop Production and Supply and Demand reports could hold one bullish guess for the corn market. | 1) | The corn market's forward curve continues to grow more bearish. |
| 2) | Technically, November soybeans still look short-term bullish. | 2) | It's possible any of a number of USDA's October guesses regarding soybean crop production or supply and demand could initially be deemed bearish. |
| 3) | Winter wheat contracts look to be in position to turn short-term trends from down to up. | 3) | Global wheat ending stocks, though misleading due to China, are expected to be bearish once again. |
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 On the bullish side of the corn market, the Dec contract continues to hold above its low of $3.44 1/4 as harvest pace remains slow due to weather. On the bearish side of the corn market is basically everything else one can think of. Yes, there will be some interest in USDA's updated production number set for release Thursday, but since planted acres, harvested acres, and yield all remain variables (rather than constants) it will be hard for the market to get too worked up over USDA's latest guesses. The key to the corn market, regardless of how the October numbers come out, is that futures spreads are more bearish than they were a month ago, indicating the commercial side holds a more bearish long-term view of 2017-2018 corn. This could lead to a challenge of Dec corn's contract low, if not eventually a test of the August 2016 low of $3.14 3/4.
SOYBEANS Technically, November soybeans still look bullish on its short-term daily chart. The contract has once again rallied off a test of trendline support, calculated Thursday at $9.63 (Nov beans had an overnight low of $9.64 1/2), and could challenge its 4-day high of $9.77 if noncommercial traders are given a reason to buy later in the day. One possible catalyst for such a move would be a larger than expected decrease in new-crop ending stocks. While this number remains nothing but a guess on USDA's, or anyone's, part it could provide at least momentary bullish enthusiasm. The average pre-report estimate came in at 453 mb versus USDA's September guess of 475 mb.
WHEAT Winter wheat contracts were showing small gains early Thursday. It's interesting to note that December Chicago is in position to see the recent minor (short-term) downtrend on its daily chart turn up with daily stochastics (short-term momentum study) below the oversold level of 20%. The December Kansas City contract is in a similar position. Fundamentally not much is expected to change following Thursday's round of monthly USDA Crop Production and Supply and Demand reports, though Uncle Sam's Department of Agriculture could provide a bullish surprise by lowering its guess on 2017-2018 ending stocks as opposed to raising it, as the average pre-report guess indicated.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.02 | -$0.03 | -$0.44 | Dec | $0.004 |
| Soybeans: | $8.88 | -$0.01 | -$0.77 | Nov | $0.002 |
| SRW Wheat: | $3.94 | -$0.02 | -$0.40 | Dec | $0.000 |
| HRW Wheat: | $3.52 | -$0.03 | -$0.76 | Dec | $0.004 |
| HRS Wheat: | $5.76 | $0.01 | -$0.43 | Dec | -$0.004 |
Darin Newsom can be reached at darin.newsom@dtn.com
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