DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 1 cent lower, January soybeans were fractionally lower, and December Chicago (SRW) was 3 cents lower.

CME Globex Recap:

With few exceptions, electronic markets were lower overnight into Cyber Monday morning. In the grain and oilseed complex only soybean meal was show small gains, softs saw only sugar holding above unchanged, while the lone wolf in energies was natural gas. Metals had moved mostly higher though with gold rallying on a sell-off in the U.S. dollar. DJIA futures were also higher.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 31.81 points (0.1%) higher at 23,557.99, the NASDAQ Composite gained 21.80 points (0.3%) to 6,889.16, and the S&P 500 rallied 5.34 points (0.2%) to 2,602.42 Friday. DJIA futures were 31 points higher early Monday morning. Asian markets closed mostly lower with Japan's Nikkei 225 off 54.86 points (0.2%), Hong Kong's Hang Seng down 180.13 points (0.6%), and China's Shanghai Composite losing 31.59 points (0.9%). European markets were trading mostly higher with London's FTSE 100 up 25.39 points (0.3%), Germany's DAX gaining 11.81 points (0.1%), and France's CAC 40 rallying 13.53 points (0.2%). The U.S. dollar index dipped 0.07 to 92.68. December 30-year T-Bonds were 3/32 lower at 154'05 while December gold gained $6.50 to $1,293.80. Crude oil was $0.51 lower at $58.44 while Brent crude slipped $0.29 to $63.57. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	National average corn basis firmed 1 1/4 cents last week, moving it to within 10 cents of the 4-year average.	1)	Seasonal basis (national average) strength in corn tends to top out in late November.
2)	National average soybean basis also firmed, just over 2 cents, last week.	2)	Marketing year total shipments of soybeans are running 13% behind last marketing year.
3)	Wheat market bulls could try to make an argument of concern over the recent warm weather across the U.S. Southern Plains and Midwest.	3)	December Chicago wheat posted a new contract low Monday morning

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 Friday's holiday abbreviated session was disappointing for corn market bulls, despite the market's attempt to rally off session lows. The sell-off adds at least a little drama to Monday's session as traders wait to see if contracts fall to new 4-day lows. That puts minor (short-term) support for the Dec contract at $3.39 3/4, March at $3.52 1/2, May $3.61, and July at $3.69. New 4-day lows would suggest a slow slide back to recently established contract lows. Meanwhile, after flirting with a possible move into neutral-to-bearish territory last week, futures spreads remain bearish heading into the end of November. The bright spot for the corn market last week, albeit dim, was a slight strengthening of national average basis. The DTN National Corn Index was calculated at $3.06 1/4 Friday, putting it 36 cents under the close of the Dec contract. The previous Friday saw national average basis calculated at 37 1/4 cents under, with the 4-year average coming in at 27 cents under.

SOYBEANS The soybean market was lower early Monday morning, unable to hold gains seen shortly after Sunday evening's opening. With little going on in the U.S., traders will continue to focus on South American weather, the equivalent of late May back in the States. Fundamentally, the biggest news remains the disappointing export pace seen domestically. Last Friday's weekly export sales and shipment update had total marketing year shipments (through Thursday, November 14) at 694 mb, or only 87% of what was seen at the same point the previous marketing year. This has kept pressure on national average basis, with the DTN National Soybean Index calculated at $9.18 1/4 Friday putting it 75 cents under the close of January futures. The 4-year average is 51 1/2 cents under at the close of the fourth week of November. The January-to-March futures spread remains under pressure with the carry sitting at 11 1/2 cents last Friday. Continued selling from commercial traders could lead to another round of noncommercial long-liquidation this week.

WHEAT Winter wheat market bulls, if any remain, have to be disappointed again Monday morning as December Chicago posted a new contract low (as I was typing this sentence) of $4.12 1/4. Having broken out of its previous sideways pattern, with a range of roughly 18 cents, it would seem the market is destined for a lower move still. The silver lining is that March is now the more heavily traded contract, and because it holds such a strong carry over the December (bearish fundamentally) March Chicago wheat could hold above the $4 market during the next sell-off. There is little fresh news to get the market excited with demand slow and next year's crop headed into dormancy. It's possible market bulls could try to generate concern over recent warm weather across the U.S. Southern Plains and Midwest as a potential threat to the crop, but if so it is falling on deaf ears for the time being.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.06	-$0.03	-$0.36	Dec	$0.000
Soybeans:	$9.18	-$0.04	-$0.75	Jan	$0.004
SRW Wheat:	$3.84	-$0.07	-$0.32	Dec	-$0.001
HRW Wheat:	$3.61	-$0.09	-$0.54	Dec	-$0.023
HRS Wheat:	$5.98	-$0.04	-$0.26	Dec	-$0.010

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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