DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was fractionally higher, November soybeans were 6 cents higher, and December Chicago (SRW) wheat was fractionlly lower.

CME Globex Recap:

Global oilseed markets were higher overnight into Monday morning, with the Chicago market led by soybeans. Contracts were sitting near session highs, supported by what looked to be new noncommercial buying interest. Corn was near unchanged, naturally, while the wheat complex was mostly lower. Other commodity sectors were mixed with cotton and gold posting small gains, crude oil a small loss. The U.S. dollar index was showing a loss early Monday, as were DJIA futures.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 33.33 points (0.1%) higher at 23,434.19, the NASDAQ Composite gained 144.49 points (2.2%) to 6,701.26, and the S&P 500 added 20.67 points (0.8%) to 2,581.07 Friday. DJIA futures were 30 points lower early Monday morning. Asian markets closed mixed with Japan's Nikkei 225 up 3.22 points, Hong Kong's Hang Seng down 20.84 points, and China's Shanghai Composite off 26.48 points (0.8%). European markets were trading mostly higher with London's FTSE 100 down 9.89 points (0.1%), Germany's DAX up 12.47 points (0.1%) and France's CAC 40 adding 3.97 points. The euro was 0.0026 higher at 1.1635 while the U.S. dollar index slipped 0.12 to 94.69. December 30-year T-Bonds were 15/32 higher at 151'21 while December gold gained $0.90 to $1,272.70. Crude oil was $0.05 lower at $53.85 while Brent crude rallied $0.11 at $60.55. China's Dalian soybean futures were mixed and Malaysian palm oil futures were higher overnight.

	BULL		BEAR
1)	December corn posted a bullish technical signal on its weekly chart last week.	1)	Fundamentally corn continues to grow more bearish, as indicated by the strengthening carry in futures spreads.
2)	January soybeans continue to hold above trendline support.	2)	The early rally in soybeans could trigger another round of noncommercial long-liquidation.
3)	A slightly lower U.S. dollar index could provide light buying interest to wheat.	3)	Winter wheat futures spreads continue to show overwhelmingly bearish fundamentals.

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 Last week saw Dec corn post a bullish technical signal on its weekly chart, indicating it could try to rally early this week. Spillover buying from soybeans overnight had corn contracts showing small gains early Monday, overnight session trade volume (futures only) picking up slightly from late last week. Fundamentally there isn't anything new to provide support to corn, with harvest still chugging away and export demand taking a back seat to soybean shipments. Last week saw national average basis (DTN National Corn Index minus Dec futures) firm slightly, calculated Friday evening at 43 1/4 cents versus the previous week's 44 cents under and thee week before that 44 1/4 cents under. Meanwhile, the 2017-2018 forward curve remains bearish through the May 2018 contract, with solid short-term commercial selling strengthening the December-to-March spread to a 14-cent carry.

SOYBEANS The soybean market posted a solid rally overnight and decent trade volume (futures only). That included nearly 22,000 contracts of the January issue changing hands through early Monday morning. With November moving into delivery, attention is now on Jan soybeans, with its daily chart showing a familiar (to those who have been following Nov beans closely) uptrend line. Trendine support for the January contract is calculated Monday at $9.89, with Jan posting an overnight range of $9.93 1/4 through $9.86 1/2 so far. Key to the market continues to be commercial selling seen in futures spreads, with the carry in the November-to-January strengthening to near 12 cents while the January-to-March sits at 10 cents. The latter is the tipping point, for now, between bearish and neutral-to-bearish when looking at the market's calculated cost of carry table.

WHEAT Winter wheat contracts were showing small losses early Monday morning following a disappointing close to last week's trade. December contracts were in position for much of last week to establish bullish signals on weekly charts, only to struggle to finish the week with fractional gains. And while technically it could be argued both Chicago and Kansas City did in fact establish bullish signals on weekly charts, little follow-through enthusiasm or new bullish enthusiasm was expected early this week. Overwhelmingly bearish fundamentals continue to dominate winter wheat, with traders paying no attention to cold weather across much of the U.S. growing area this past weekend. And rightfully so, with it being far too early to be talking about potential winter kill of the 2018 crop.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.06	-$0.01	-$0.43	Dec	$0.004
Soybeans:	$8.96	$0.04	-$0.79	Nov	$0.000
SRW Wheat:	$3.90	-$0.04	-$0.38	Dec	$0.001
HRW Wheat:	$3.54	-$0.03	-$0.71	Dec	$0.005
HRS Wheat:	$5.82	-$0.01	-$0.35	Dec	$0.020

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

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

(BAS)

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