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6:00 a.m. CME Globex:

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

CME Globex Recap:

It's a quiet morning in the grain and oilseed complex, maybe too quiet for markets like corn and wheat that seem to get spooked easily. Soybeans seem unfazed by the roll of the calendar to Friday the 13th, with light follow-through buying from Thursday providing support. Elsewhere, the energy complex is off and running early with Brent crude up more than $1.00. The U.S. dollar index and gold are both near unchanged as DJIA futures posted an overnight gain.


The Dow Jones Industrial Average closed 31.88 points (0.1%) lower at 22,841.01, the NASDAQ Composite lost 12.04 points (0.2%) to 6,591.51, and the S&P 500 dipped 4.31 points (0.2%) to 2,550.93 Thursday. DJIA futures were 14 points higher early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei up 200.46 points (1.0%), Hong Kong's Hang Seng gaining 17.40 points, and China's Shanghai Composite up 4.42 points (0.1%). European markets were trading mostly higher with London's FTSE 100 off 15.04 points (0.2%), Germany's DAX adding 13.55 points (0.1%), and France's CAC 40 up 3.16 points. The euro was 0.0002 lower at 1.1829 while the U.S. dollar index slipped 0.03 to 93.07. December 30-year T-Bonds were unchanged at 153'03 while December gold lost $0.20 to $1,296.30. Crude oil was $0.91 higher at $51.51 while Brent crude rallied $1.19 to $57.44. China's Dalian soybean market was mixed and Malaysian palm oil futures were higher overnight.

1) Spillover buying from soybeans could support the corn market again Friday. 1) Dec corn's move to a new contract low Thursday is not bullish, keeping in place its short-term pattern of lower highs and lower lows.
2) November soybeans saw uptrends on both daily and weekly charts strengthen Thursday. 2) If commercial traders move to the sidelines in soybeans Friday, the market could give back some of Thursday's gains.
3) Winter wheat contracts are technically oversold, possibly limiting new selling interest. 3) Wheat's long-term fundamentals remain bearish.

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CORN Corn is an interesting study of Mandelbrot's fractals with the Dec contract's daily chart showing a similar lower highs and lower lows pattern to the overall market's long-term monthly chart. Thursday saw Dec corn post a new contract low of $3.42 1/2 before it followed the soybean market higher. This new low correlates to the August 2016 major low of $3.14 on the monthly chart. The bottom line is a series of lower highs and lower lows is not bullish, short-term or long-term, particularly with the carry in the market's forward curve covering a bearish level of calculated full commercial carry out through the July 2018 contract. Friday's session will see a return to low volume trade, with volume spikes reserved for USDA report days only.

SOYBEANS From a technical point of view the November contract looks more bullish on both its secondary (intermediate-term) weekly and minor (short-term) daily charts. The contract moved to a new 4-week high of $9.97 3/4 Thursday, seemingly rejoining its secondary uptrend on what could be considered a seasonal move. Soybeans, both futures and cash tend to rally through early December. The contract's minor uptrend also strengthened, resulting in an immediate test of short-term resistance at $9.99. If/when the contract moves beyond this mark, the next target (technically) is $10.17. It will be interesting to see if commercial traders continue to buy Friday, or if Thursday shopping spree took care of this group's interest for the week.

WHEAT The wheat complex was mixed early Friday with Minneapolis spring wheat higher while winter markets were struggling to stay at unchanged. Thursday's USDA reports did wheat market bulls no favors as domestic and world ending stocks projections were raised, again. Meanwhile, the minor (short-term) trends for both Chicago and Kansas City December wheat remain down. The Chicago contract is slowly sneaking in on its low of $4.22 1/2, creeping to $4.28 during Thursday's sell-off. However, both contracts are technically oversold meaning buyers could be hiding just around the next dark corner.

Darin Newsom can be reached at darin.newsom@dtn.com

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