DTN Early Word Grains
Another Quiet Morning
December corn was 1 cent lower, January soybeans were 2 cents lower, and December Chicago (SRW) was unchanged.
CME Globex Recap:The grain and oilseed complex was relatively quiet overnight, again, with the fireworks of the previous session's selling in Malaysian palm oil seemingly spent. While the market was lower once again, Chicago bean oil was able to climb and canola was mixed. Soybeans and corn were lower and the wheat complex was mixed early Tuesday. Other commodities were mostly higher, led by gains in both crude oil and gold.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 72.09 points (0.3%) higher at 23,430.33, the NASDAQ Composite gained 7.92 points (0.1%) to 6,790.71, and the S&P 500 rallied 3.29 points (0.1%) to 2,582.14 Monday. DJIA futures were 53 points higher early Tuesday morning. Asian markets closed higher with Japan's Nikkei 225 up 154.72 points (0.7%), Hong Kong's Hang Seng gaining 557.76 points (1.9%), and China's Shanghai Composite up 18.10 points (0.5%). European markets were trading higher with London's FTSE 100 up 16.04 points (0.2%), Germany's DAX rallying 61.50 points (0.5%), and France's CAC 40 adding 23.48 points (0.4%). The euro was 0.0005 lower at 1.1727 while the U.S. dollar index gained 0.04 to 94.10. December 30-year T-Bonds were 17/32 higher at 154'06 while December gold gained $3.90 to $1,279.20. Crude oil was $0.11 higher at $56.53 while Brent crude added $0.13 to $62.35. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Noncommercial short-covering could continue to provide support to the corn market. | 1) | Recent commercial buying in corn is sourcing short-term supplies only. Long-term the market has bearish fundamentals to deal with. |
| 2) | Soybean deferred futures spreads continue to reflect a neutral view of supply and demand, as opposed to the bearish short-term view. | 2) | Short-term commercial selling continues to pressure the soybean market, and could lead to increased noncommercial long-liquidation. |
| 3) | With Chicago wheat near its recent lows, noncommercial traders could look to cover some short futures positions. | 3) | July Kansas City wheat moved to a new contract low Monday. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn drifted lower overnight in trade similar to what was seen the overnight session before. That being the case, it would not be surprising to see commercial buying once again enter the market during the day session. The December-to-March futures spread has seen its carry weaken significantly over recent weeks, nearly pulling back to a neutral-to-bearish level of full commercial carry as opposed to the ongoing bearish reading of market fundamentals. Much of this has to do with farmers locking bin doors as harvest comes to an end, leaving merchandisers to push prices a bit to secure supplies. Meanwhile, the large net-short futures position held by noncommercial traders remains a bullish factor as this group, seeing steady commercial buying, could look to lighten their load a bit.
SOYBEANS The soybean market spent another night consolidating, drifting lower on light noncommercial selling. As of last Friday's CFTC Commitment of Traders report (through Tuesday, November 14), this group continued to hold a net-long futures position. While this position has likely decreased again, it continues to leave the market vulnerable to pressure from long-liquidation, particularly if the commercial side starts selling again. Technical patterns on daily charts are indicating much, while the path of least resistance on weekly studies still looks to be down. Similar to Monday, it would not be surprising to see soybeans trade both sides of unchanged before the day session is over.
WHEAT The wheat complex was quietly mixed early Tuesday morning, showing few signs of life yet. December Chicago continues to troll along the bottom of its trading range between $4.16 1/4 and $4.34 1/4, with little reason to break out at this time. Meanwhile new-crop July Kansas City hit a new low of $4.62 1/4 Monday before recovering slightly. Until something changes fundamentally, look for winter wheat to continue its slow grind.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.08 | $0.03 | -$0.37 | Dec | $0.006 |
| Soybeans: | $9.14 | $0.01 | -$0.76 | Jan | $0.011 |
| SRW Wheat: | $3.90 | -$0.05 | -$0.32 | Dec | $0.007 |
| HRW Wheat: | $3.63 | -$0.05 | -$0.53 | Dec | $0.012 |
| HRS Wheat: | $6.00 | -$0.08 | -$0.26 | Dec | $0.005 |
Darin Newsom can be reached at darin.newsom@dtn.com
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