DTN Early Word Grains
Last Friday of the Month
December corn was fractionally lower, November soybeans were fractionally higher, and December Chicago (SRW) wheat was 1 cent lower.
CME Globex Recap:October has come and gone quickly with overnight trade leading to lower markets to start the last Friday of the month. The oilseed complex was higher while grains, including oats and rice, were mostly lower. Softs and metals were both lower early Friday while the energy complex was mostly lower. Commodities in general continue to struggle with the strong rally of the U.S. dollar index, while DJIA futures also posted a solid gain again overnight.
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The Dow Jones Industrial Average closed 71.40 points (0.3%) higher at 23,400.86, the NASDAQ Composite lost 7.12 points (0.1%) to 6,556.77, and the S&P 500 added 3.25 points (0.1%) to 2,560.40 Thursday. DJIA futures were 43 points higher early Friday morning. Asian markets closed mostly higher with Japan's Nikkei 225 up 268.67 points (1.2%), Hong Kong's Hang Seng gaining 236.47 points (0.8%), and China's Shanghai Composite rallying 9.25 points (0.3%). European markets were trading mostly higher with London's FTSE 100 gaining 18.01 points (0.2%), Germany's DAX up 108.42 points (0.8%) and France's CAC 40 adding 56.66 points (1.0%). The euro was 0.0017 lower at 1.1635 while the U.S. dollar index added another 0.17 to 94.81. December 30-year T-Bonds were 4/32 higher at 150'27 while December gold lost $0.80 to $1,268.80. Crude oil was $0.11 lower at $52.53 while Brent crude was off $0.20 at $59.10. China's Dalian soybean futures were lower and Malaysian palm oil futures were mostly higher overnight.
| BULL | BEAR | ||
| 1) | A winter storm moving across the U.S. Northern Plains is expected to cause corn harvest delays for that area. | 1) | Corn looks to have lost the bullish momentum seen earlier in the week, content to drift lower into the weekend. |
| 2) | Demand remains solid for U.S. soybean supplies. | 2) | Strong commercial selling could drive soybean futures through nearby short-term support levels to end the week. |
| 3) | Winter wheat contracts are nearing technical indicators that intermediate-term trends are turning up. | 3) | Selling tied to the sharp rally by the U.S. dollar could erase potential bullish technical signals in wheat. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN It was another quiet night for December corn with only 4,800 contracts (futures only) changing hands as it posted a 1 cent trading range. One cent, that's all. Needless to say the contract was sitting within fractions of its session high and low early Friday morning. Technically, nothing has changed for quite some time as the minor (short-term) pattern on December corn's daily chart still looks to be sideways to down. Meanwhile, a possible secondary (intermediate-term) bullish reversal is setting up on the contract's weekly chart. Market volatility and price (both futures and cash) remain low, but this combination has not brought a lot of fresh buying to the market of late. Friday afternoon's CFTC Commitments of Traders report could be interesting, potentially showing noncommercial short-covering through the week ending Tuesday, Oct. 24.
SOYBEANS Possibly the most influential factor in soybeans heading toward the weekend is the strong downtrend seen in futures spreads. The November-to-January finally saw its carry plow through the 11-cent barrier, sitting at 11 1/2 cents early Friday morning. Similarly, the carry in the January-to-March has broken through 10 cents and is expected to follow the path laid out by its predecessor. This spread activity continues to reflect an increasingly bearish supply and demand situation, with ideas of increasing supplies offsetting numbers, particularly export shipments, showing strong demand. The November contract, spending its last days as relevant, is testing minor (short-term) support at $9.71 3/4, posting a low of $9.70 1/4 overnight before rallying back to $9.72. If this support line fails, the next is pegged at $9.62 1/4. For now the market has lost its bullish momentum, short-term, again due in large part to ongoing commercial pressure. Friday afternoon's CFTC Commitment of Traders report is expected to show noncommercial traders reducing their net-long futures holdings for the week ending Tuesday, Oct. 24.
WHEAT One would think the strong rally seen early this week would have December Chicago wheat comfortably in position to establish a number of secondary (intermediate-term) bullish technical signals on its weekly chart Friday. One would think wrong. While these should have been a no-brainer, the contract finds itself only 5 cents above last week's settlement of $4.26. If the U.S. dollar index gets rolling again Friday, as it did Thursday, there may be enough selling in commodities uncovered to push December Chicago wheat to a lower close for the week. If so, this week's outside trading range immediately flips from bullish to bearish, indicating the market's overwhelmingly bearish fundamentals remain in control.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.07 | -$0.01 | -$0.44 | Dec | -$0.001 |
| Soybeans: | $8.92 | -$0.04 | -$0.79 | Nov | $0.003 |
| SRW Wheat: | $3.94 | -$0.04 | -$0.38 | Dec | $0.002 |
| HRW Wheat: | $3.57 | -$0.05 | -$0.71 | Dec | $0.007 |
| HRS Wheat: | $5.83 | $0.00 | -$0.38 | Dec | $0.011 |
Darin Newsom can be reached at darin.newsom@dtn.com
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