DTN Early Word Grains

Markets Get the Green Light Again

6:00 a.m. CME Globex:

December corn was fractionally higher, November soybeans were 7 cents higher, and December Chicago (SRW) wheat was 1 cent higher.

CME Globex Recap:

The grain and oilseed complex was higher again early Wednesday morning, this time with soybeans showing the largest move. The rest of the commodity complex was mixed with December cotton slightly higher, energies mixed and metals lower overnight. The U.S. dollar index was slightly lower while DJIA futures continued to rally.

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OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 167.80 points (0.7%) higher at 23,441.76, the NASDAQ Composite gained 11.60 points (0.2%) to 6,598.43, and the S&P 500 rallied 4.15 points (0.2%) to 2,569.13 Tuesday. DJIA futures were 2 points higher early Wednesday morning. Asian markets closed mostly higher with Japan's Nikkei down 97.55 points (0.5%), Hong Kong's Hang Seng up 147.92 points (0.5%), and China's Shanghai Composite gaining 8.65 points (0.3%). European markets were trading mostly higher with London's FTSE 100 off 19.13 points (0.2%), Germany's DAX gaining 5.67 points and France's CAC 40 adding 13.59 points (0.3%). The euro was 0.0008 higher at 1.1769 while the U.S. dollar index dipped 0.02 to 93.91. December 30-year T-Bonds were 23/32 lower at 150'31 while December gold fell $5.10 to $1,273.20. Crude oil was $0.24 lower at $52.23 while Brent crude slipped $0.13 to $58.20. China's Dalian soybean futures were mixed and Malaysian palm oil futures were higher overnight.

BULL BEAR
1) Corn, both futures and cash (DTN National Corn Index) is turning more bullish on both daily (short-term) and weekly (intermediate-term) charts. 1) The carry in corn's forward curve remains bearish, possibly limiting buying interest.
2) November soybeans have been able to rally off short-term technical support. 2) The January-to-March soybean futures spread has followed the November-to-January spread into bearish territory.
3) Winter wheat contracts are nearing technical indicators that intermediate-term trends are turning up. 3) Despite recent weakening of the carry, winter wheat futures spreads continue to reflect a bearish long-term view of supply and demand.

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 COMMENTS

CORN The corn market was higher again early Wednesday morning with the December contract testing trend-line resistance connecting the highs of $3.62 (September 6) and $3.58 (September 29). This puts resistance, Wednesday, at $3.53 3/4. The contract's overnight was - $3.53 3/4. Given daily stochastics (short-term momentum study) are still bullish, it seems likely the contract will poke through this resistance, possibly before the end of the overnight session. Also, the contract's weekly chart is set to turn bullish at the end of this week, finishing off a double-bottom pattern near $3.42 1/2 with a bullish outside week. This would indicate the market's secondary (intermediate-term) trend is set to turn up, a late start to the market's seasonal move.

SOYBEANS The soybean market posted a solid rally overnight, led by the November contract rallying off a test of both trend-line ($9.71 1/2) and retracement ($9.71 3/4) support with its Tuesday low of $9.72 3/4. The struggle the market continues to have is a lack of commercial buying interest, with the November-to-January futures spread flattening out near the 10 1/2-cent carry level. Meanwhile, the January-to-March spread has also crept into bearish territory of calculated full commercial carry as it widened past the 10-cent mark this week. The U.S. soybean harvest continues to chug along, likely the cause of much of the commercial pressure seen recently. However, noncommercial interests have also been selling, leading to the lower daily close five out of the last seven sessions.

WHEAT Winter wheat contracts were higher again early Wednesday, led by a bullish turn in the Chicago December contract. Similar to December corn, December Chicago wheat looks to be in the process of establishing a double-bottom on its weekly chart, coinciding with bullish signals from its weekly stochastics (intermediate-term momentum study). Also, there is the possibility the contract could post a bullish outside trading range if it can climb above last week's high of $4.42 3/4 before Friday's close. The overnight high was $4.40 1/4. Chicago wheat has seen continued support from commercial buying, indicated by the ongoing whittling away of the carry in futures spreads.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.09 $0.01 -$0.44 Dec $0.000
Soybeans: $8.96 -$0.05 -$0.80 Nov $0.003
SRW Wheat: $4.00 $0.02 -$0.38 Dec $0.006
HRW Wheat: $3.61 $0.01 -$0.73 Dec $0.005
HRS Wheat: $5.80 $0.04 -$0.40 Dec -$0.009

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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