DTN Early Word Grains
Rain Makes Grain, Even at Harvest
December corn was 1 cent lower, November soybeans were 5 cents lower, and December Chicago (SRW) wheat was fractionally higher.
CME Globex Recap:Another rainy weekend over parts of the western Corn Belt slowed harvest, and brought light selling back to corn and soybeans overnight. No, it doesn't make a lot of sense, but Nov beans are down 5 cents with Dec corn off a penny. Wheat contracts were holding near unchanged early Monday morning. Speaking of things not making sense: Other commodities, both energies and metals, were higher despite a rally in the U.S. dollar index. Meanwhile, DJIA futures continued to move higher.
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The Dow Jones Industrial Average closed 30.71 points (0.1%) higher at 22,871.72, the NASDAQ Composite gained 14.29 points (0.2%) to 6,605.80, and the S&P 500 added 2.24 points (0.1%) to 2,553.17 Friday. DJIA futures were 20 points higher early Monday morning. Asian markets closed mostly higher with Japan's Nikkei up 100.38 points (0.5%), Hong Kong's Hang Seng gaining 216.37 points (0.8%), and China's Shanghai Composite off 12.05 points (0.4%). European markets were trading higher with London's FTSE 100 up 6.05 points (0.1%), Germany's DAX gaining 23.62 points (0.2%), and France's CAC 40 adding 6.31 points (0.1%). The euro was 0.0025 lower at 1.1795 while the U.S. dollar index gained 0.17 to 93.22. December 30-year T-Bonds were 4/32 lower at 153'28 while December gold rallied $2.40 to $1,307.00. Crude oil was $0.70 higher at $52.15 while Brent crude gained $0.80 to $57.97. China's Dalian soybean market was mixed and Malaysian palm oil futures were higher overnight.
| BULL | BEAR | ||
| 1) | The corn market is in a more bullish seasonal timeframe. | 1) | Dec corn's move to a new contract low last Thursday is not bullish, keeping in place its short-term pattern of lower highs and lower lows. |
| 2) | November soybeans strengthened uptrends on short-term daily and intermediate-term weekly charts last week. | 2) | Soybeans remain susceptible to increased commercial selling tied to harvest. |
| 3) | Winter wheat contracts are nearing bullish turns on weekly charts. | 3) | Wheat's long-term fundamentals remain bearish. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Late last week saw December corn recapture the midpoint of its sideways range between the low of $3.44 1/4 and high of $3.62. However, it needs to be remembered that the contract posted a new low pre-USDA report release of $3.42 1/2 before riding the coattails of soybeans higher. Dec corn continues to show a series of lower highs and lower lows on its short-term daily chart, dating back to August 31. This pattern mirrors what is seen on the market's long-term monthly chart, dating back to its initial low of $3.18 1/4 from October 2014. Monday's session is expected to be quiet, with corn staying in the red (lower) unless soybeans regain bullish momentum. Traders won't pay much attention to weekly export inspections set for release Monday morning, or do much in anticipation of weekly crop progress numbers set for release Monday afternoon. The overriding factor at this time remains the prospect of a large harvest, no matter how delayed it might be.
SOYBEANS So what do you do if your November soybeans, after spending the latter part of last week posting bullish technical signals on short-term daily and intermediate-term weekly charts? That's right, you trade lower when the bell rings to begin Sunday night's session into Monday morning. The contract uncovered renewed selling interest with last week's test of minor (short-term) technical resistance near $9.99, though it still looks to be on track to test the next level of resistance at $10.17 1/4. Seasonally both futures and cash (DTN National Soybean Index, NSI.X, national average cash price) tend to trend up through the first week of December. Therefore a lower start to the week isn't as important as where the markets finish this coming Friday. Fundamentally, harvest over parts of the U.S. continue to be slowed by rain, though traders seem to be focused on the long-term idea that USDA is once again overestimating year-end ending stocks. While this might not rally the market Monday, it should keep buyers interested enough to limit sell-offs.
WHEAT The wheat complex was unchanged to fractionally higher early Monday. From a technical point of view, December winter wheat contracts (both Chicago and Kansas City) look to have established minor (short-term) sideways trends on daily charts, holding just above previous lows of $4.22 1/2 (Chicago) and $4.20 (Kansas City). Also, as noted in this past weekend's Technically Speaking blog update, secondary (intermediate-term) trends are nearing a bullish turn as well. Fundamentally there is little to get excited about as winter wheat planting continues and demand overall remains lackluster.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.08 | $0.03 | -$0.44 | Dec | -$0.005 |
| Soybeans: | $9.23 | $0.08 | -$0.77 | Nov | -$0.001 |
| SRW Wheat: | $4.00 | $0.09 | -$0.39 | Dec | -$0.001 |
| HRW Wheat: | $3.60 | $0.10 | -$0.76 | Dec | $0.000 |
| HRS Wheat: | $5.72 | $0.03 | -$0.43 | Dec | -$0.003 |
Darin Newsom can be reached at darin.newsom@dtn.com
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