DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 1 cent higher, January soybeans were 3 cents higher, and December Kansas City (HRW) wheat was 2 cents higher.

CME Globex Recap:

The grain and oilseed complex, like much of the rest of the larger commodity complex, was showing green early Friday morning. Soybeans and corn were generally limited to erasing Thursday's sell-off, while wheat tried to build on the previous day's small rally. Softs, energies, and metals were also showing gains, mostly, with light support possibly tied to the lower U.S. dollar index. Also, DJIA futures were lower again as the Big Board is expected to continue its volatile ways Friday.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 187.08 points (0.8%) higher at 23,458.36, the NASDAQ Composite gained 87.08 points (1.3%) to 6,793.29, and the S&P 500 rallied 21.02 points (0.8%) to 2,585.64 Thursday. DJIA futures were 26 points lower early Friday morning. Asian markets closed mostly higher with Japan's Nikkei 225 up 45.68 points (0.2%), Hong Kong's Hang Seng gaining 180.28 points (0.6%), and China's Shanghai Composite down 16.34 points (0.5%). European markets were trading mixed with London's FTSE 100 off 12.94 points (0.2%), Germany's DAX rallying 6.37 points, and France's CAC 40 adding 4.33 points (0.1%). The euro was 0.0032 higher at 1.1803 while the U.S. dollar index lost 0.22 to 93.69. December 30-year T-Bonds were 1/32 higher at 153'19 while December gold gained $5.20 to $1,283.40. Crude oil was $0.79 higher at $55.93 while Brent crude added $0.55 to $61.91. China's Dalian soybean futures were near unchanged and Malaysian palm oil futures were lower overnight.

	BULL		BEAR
1)	The move to new lows in corn has sparked at least light commercial buying interest, evident in firming basis and weaker carry of futures spreads.	1)	Thursday's weekly export sales and shipment update continues to project total corn demand coming up more than 600 mb short of USDA's estimate.
2)	Soybean contracts continue to hold above recent lows, consolidating, while building potentially bullish short-term technical signals.	2)	While short-term technicals could turn bullish in soybeans, the market's weekly charts indicate more downside is not only possible, but probable.
3)	The wheat complex was able to build, slightly, on Thursday's rally.	3)	Since wheat contracts closed higher Thursday, it would only make sense for a lower close Friday. After all, wheat is wheat.

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

December corn posted another new low of $3.36 1/4 Thursday before stabilizing (I guess that's what one would call it) overnight. Dec corn moved within a 1 1/2-cent trading range, staying above its new low, on decent trade volume (futures only) of nearly 25,000 contracts. This would imply that Friday could be a more active day for the market. Corn has recently seen increased commercial buying interest, evident in slowly firming national average basis and a weaker carry in the December-to-March futures spread. However, this buying isn't a result of commercial traders growing bullish but rather attempting to source enough tightly held supplies to meet what demand exists at this point. Thursday's weekly export sales and shipment numbers (for the week ended Thursday, November 9) showed marketing year total shipments continuing to run 18% behind the 4-year average and project to a total demand estimate of 1.513 bb. The latter is 669 mb less that USDA's November export demand estimate.

SOYBEANS

Soybean contracts were a couple cents higher early Friday morning following a relatively quiet overnight session. Volume (futures only) for Jan beans registered only 6,000 contracts as the issue continues to consolidate above its recent low of $9.67. Technically, support on the contract's weekly chart is at $9.61, and with the carry in the January-to-March spread strengthening, it seems the contract is destined for a more absolute test of this support. A key issue the market continues to face is the increasingly bearish commercial outlook (stronger carry) while noncommercial traders hold a large net-long futures position. It will be interesting to see in Friday afternoon's CFTC Commitments of Traders report if this latter group reduced its net-long holdings for the week ended Tuesday, November 14.

WHEAT

The wheat complex was showing small gains early Friday morning, supported by what looked to be continued commercial buying interest. While overnight trade in futures spreads can be skewed by low trade volume, all three markets were showing slightly weaker carry in their forward curves. Commercial interest would seem to make sense, if not for the underlying commodity is wheat, given the low price of winter wheat contracts. While next year's seeded acreage remains an unknown, it is expected to be smaller than the previous year. As of now, there is no weather threat to the crop in the ground as it nears moving into winter dormancy. Friday's session could go either way, literally, given winter wheat's track record this week.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$2.98	-$0.02	-$0.38	Dec	$0.002
Soybeans:	$8.95	-$0.03	-$0.77	Jan	$0.012
SRW Wheat:	$3.88	$0.02	-$0.33	Dec	$0.005
HRW Wheat:	$3.63	-$0.01	-$0.54	Dec	$0.002
HRS Wheat:	$6.03	$0.06	-$0.27	Dec	$0.006

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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