DTN Early Word Grains
The Time is Right
December corn was 1 cent higher, January soybeans were 1 cent lower, and December Chicago (SRW) wheat was 2 cents higher.
CME Globex Recap:In case you missed it Sunday, daylight savings time came to an end, providing us all with an hour to do whatever we pleased. That didn't mean much to a still quiet grain and oilseed complex Sunday evening through early Monday morning. Most of the interest was in the energy complex following a weekend of political arrests in the kingdom of Saudi Arabia. Still, the rally in both Brent and WTI crude oil was minimal, as was the move higher in gold.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 22.93 points (0.1%) higher at 23,539.19, the NASDAQ Composite gained 49.49 points (0.7%) to 6,764.44, and the S&P 500 added 7.99 points (0.3%) to 2,587.84 Friday. DJIA futures were 1 point higher early Monday morning. Asian markets closed mixed with Japan's Nikkei 225 up 9.23 points, Hong Kong's Hang Seng off 6.81 points, and China's Shanghai Composite gaining 16.43 points (0.5%). European markets were trading mostly lower with London's FTSE 100 down 12.24 points (0.2%), Germany's DAX down 26.16 points (0.2%) and France's CAC 40 off 7.70 points (0.1%). The euro was 0.0004 lower at 1.1605 while the U.S. dollar index dipped 0.02 to 94.90. December 30-year T-Bonds were 11/32 higher at 154'00 while December gold rallied $2.90 to $1,272.10. Crude oil was $0.31 higher at $55.95 while Brent crude gained $0.36 to $62.43. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower again overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | National average corn basis firmed last week, putting the cash market in position to get a late start on its seasonal uptrend. | 1) | Trends on corn's monthly (long-term), weekly (intermediate-term), and daily (short-term) charts all remain sideways-to-down. |
| 2) | Soybeans could see another big number in the weekly export inspection update (for the week ending Thursday, November 2). | 2) | Soybeans could see increased selling from noncommercial traders following last Friday's CFTC report (positions as of Tuesday, October 31). |
| 3) | Technically, winter wheat contracts are seeing a slight build in short-term bullish momentum. | 3) | Winter wheat's long-term fundamentals remain bearish, limiting potential noncommercial buying interest. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn markets (cash and futures) continue to trend sideways on daily (minor, short-term), weekly (secondary, intermediate-term), and monthly (major, long-term) charts. However, Friday's calculated DTN National Corn Index (NCI.X, national average cash price) saw national average basis strengthen by approximate 1 1/4 cents from the previous Friday. The rally in the NCI.X last week, if one squints hard enough, has the early markings of a normal seasonal uptrend. The NCI.X needs to clear the high weekly close of $3.11 1/2 (week of September 5) to confirm such a move (for more information, see the update Technically Speaking blog posts on DTN later Monday morning). Fundamentally there is little fresh news, with harvest still plugging along where allowed by weather. Monday's weekly export inspections (for the week ending Thursday, November 2) aren't expected to provide much excitement. However, Decent overnight trade volume (futures only) of 16,200 contracts for Dec corn indicates Monday's session could be more active again.
SOYBEANS Chicago soybeans couldn't hold initial overnight gains with contracts slipping below unchanged through early Monday morning. The January contract is on the verge of a bearish breakout of the large wedge pattern on its weekly chart (for more information, see last Friday's Technically Speaking blog post on DTN), while the minor (short-term) trend on its daily chart threatens to turn more bearish. All this could be considered contra-seasonal as the soybean markets (both futures and cash) tend to show an uptrend this time of year. Fundamentally, with harvest in the U.S. nearing completion, the market will continue to monitor demand for U.S. supplies with Monday's weekly export inspection update (for the week ending Thursday, November 2) and weather in Brazil. Delivery of 51 contracts was reported against the November issue, putting the total at 247 contracts.
WHEAT Winter wheat markets were showing gains early Monday morning, following on the heels of what looks to be now another classic head-fake last week as contracts posted new lows. Since last Tuesday break, both December Chicago and Kansas City have posted modest rallies. While no clearly bullish technical signals have been established, both could now look to climb back toward the high end of the short-term trading range on daily charts, meaning a test of $4.40 is possible in Chicago. Fundamentally there is little to get excited about with supplies seemingly endless and demand lackluster.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.07 | -$0.02 | -$0.41 | Dec | $0.004 |
| Soybeans: | $9.03 | -$0.12 | -$0.84 | Jan | $0.005 |
| SRW Wheat: | $3.91 | $0.00 | -$0.35 | Dec | $0.000 |
| HRW Wheat: | $3.66 | $0.02 | -$0.61 | Dec | $0.010 |
| HRS Wheat: | $5.94 | $0.04 | -$0.31 | Dec | $0.021 |
Darin Newsom can be reached at darin.newsom@dtn.com
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