DTN Early Word Grains
Another Day Lower and Deeper in Red
December corn was fractionally lower, November soybeans were 1 cent lower, and December Chicago (SRW) wheat was 2 cents lower.
CME Globex Recap:The grain and oilseed complex was lower again Wednesday morning, with markets acting as if they were trying to drag 16 tons of number-nine coal out of the mine. However northern grain and oilseeds, most notably Minneapolis spring wheat and canola, were both showing small gains. Outside commodities were mostly mixed with cotton and metals lower while softs were higher and energies mostly higher. DJIA futures posted another strong rally, hinting at the big board moving back above 23,000.
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The Dow Jones Industrial Average closed 40.48 points (0.2%) higher at 22,997.44, after posting a new high of 23,002.20 Tuesday. The NASDAQ Composite slipped 0.35 point to 6,623.66 and the S&P 500 added 1.72 points to 2,559.36 Tuesday. DJIA futures were 44 points higher early Wednesday morning. Asian markets closed mixed with Japan's Nikkei up 26.93 points (0.1%), Hong Kong's Hang Seng gaining 14.27 points, and China's Shanghai Composite adding 9.75 points (0.3%). European markets were trading mostly higher with London's FTSE 100 up 24.71 points (0.3%), Germany's DAX gaining 74.10 points (0.6%), and France's CAC 40 rallying 27.02 points (0.5%). The euro was 0.0018 lower at 1.1748 while the U.S. dollar index gained 0.16 to 93.67. December 30-year T-Bonds were 20/32 lower at 153'14 while December gold fell another $3.90 to $1,282.30. Crude oil was $0.23 higher at $52.11 while Brent crude gained $0.53 to $58.41. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.
| BULL | BEAR | ||
| 1) | The most bullish factor for corn remains the seasonal tendencies for futures, cash and basis. | 1) | Most every other factor is bearish for corn, most notably the strong carry in the market's forward curve. |
| 2) | Soybeans look to be building a bullish consolidation pattern on daily charts. | 2) | Deferred soybean futures spreads have seen a strengthening carry, an indication of a more bearish long-term view of fundamentals. |
| 3) | Winter wheat contracts continue to hold above key lows. | 3) | Given winter wheat's bearish forward curves, it would not be surprising to see Chicago and Kansas City move to new lows. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN To December corn's credit, it didn't go down much overnight. Then again, when the entire range was just over a penny on trade volume (futures only) of 7,100 contracts, one wouldn't expect it to be too far from the previous day's close. The song remains the same for corn: neutral-to-bearish technically and bearish fundamentally. However, some light commercial support was indicated by deferred spreads at Tuesday's close, so at least there is something to watch Wednesday to see if this group is buying once again. Keep in mind that seasonally both futures and cash (as well as basis) tend to trend up through the fall.
SOYBEANS If soybeans can't muster a rally Wednesday and close lower once again, it would mark three days moving against the minor (short-term) uptrend. That's actually not as ominous as it seems, but rather a normal reaction to a sharp rally like late last week's. In fact, it could be argued that November soybeans are in the process of forming a bullish consolidation pattern, though whether or not it's a flag or pennant is hard to say. Either way, based on the technical analysis saying of "flags fly at half-mast," once bullish momentum gets rolling again, November beans could rally back through short-term resistance at $9.99 and make a run at the next mark of $10.17 1/4.
WHEAT The wheat complex was mixed early Wednesday morning with winter markets lower while Minneapolis spring wheat showed small gains. All three markets still looked tied to technicals, with December Chicago and Kansas City trying to finish off short-term downtrends while holding intermediate-term sideways trends on weekly charts in place. To do so both need to remain above previous contract lows of $4.22 1/2 and $4.20 respectively. Meanwhile, December Minneapolis is trying to establish a short-term uptrend that could be strong enough to turn its intermediate-term trend up as well.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.06 | $0.00 | -$0.44 | Dec | $0.005 |
| Soybeans: | $9.07 | -$0.07 | -$0.78 | Nov | -$0.004 |
| SRW Wheat: | $3.96 | -$0.01 | -$0.39 | Dec | $0.003 |
| HRW Wheat: | $3.59 | $0.00 | -$0.74 | Dec | $0.006 |
| HRS Wheat: | $5.70 | $0.03 | -$0.41 | Dec | $0.014 |
Darin Newsom can be reached at darin.newsom@dtn.com
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