DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was unchanged, January soybeans were 3 cents lower, and March Chicago (SRW) was 2 cents higher.

CME Globex Recap:

A quick look at the quote screen first thing Wednesday morning shows a lot of red, with a touch of green for garnish, just like a Bloody Mary. The grain and oilseed complex was mixed with global oilseeds mostly lower, corn near unchanged, and wheat higher. Metals, energies, and softs were all lower as the U.S. dollar index posted a small gain and DJIA futures showed a solid rally on follow-through buying from the Big Board's big Tuesday rally.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 255.93 points (1.1%) higher at 23,836.71, the NASDAQ Composite gained 33.84 points (0.5%) to 6,912.36, and the S&P 500 rallied 25.62 points (1.0%) to 2,627.04 Tuesday. DJIA futures were 62 points higher early Wednesday morning. Asian markets closed mostly higher with Japan's Nikkei 225 gaining 110.96 points (0.5%), Hong Kong's Hang Seng off 57.02 points (0.2%), and China's Shanghai Composite up 4.21 points (0.1%). European markets were trading mostly higher with London's FTSE 100 down 44.43 points (0.6%), Germany's DAX up 114.15 points (0.9%), and France's CAC 40 gaining 30.23 points (0.6%). The euro lost 0.0009 to 1.1832 as the U.S. dollar index added 0.08 to 93.29. December 30-year T-Bonds were 4/32 lower at 154'05 while December gold lost $1.40 to $1,293.60. Crude oil was $0.45 lower at $57.54 while Brent crude lost $0.57 to $63.04. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

	BULL		BEAR
1)	The most bullish factor for corn continues to be new contract lows while noncommercial traders hold a sizeable net-short futures position.	1)	Corn's new contract lows only set the stage for lower lows to be established the next day.
2)	Soybeans could find renewed commercial buying as November nears its end. Could, but probably won't.	2)	The carry in the March-to-May futures spread is now covering a slightly bearish 67% of calculated full commercial carry.
3)	After posting new contract lows Monday, winter wheat contracts could be looking at a standard three-day rally against the prevailing trend.	3)	Commercial buying supported winter wheat Tuesday, meaning that same group could likely be sellers Wednesday.

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 As a parting shot before moving into delivery Thursday, December corn posted a new contract low of $3.35 1/2 overnight. This was a tick below Tuesday's new low, all done quietly as the contract moved within a 1 cent range through early Wednesday morning. There continues to be nothing for traders to get excited about given abundant supplies and slower demand than expected. The December-to-March futures spread is showing a carry of 13 3/4 cents (79% of calculated full commercial carry) as it prepares to hand the baton to the March-to-May spread, already at an 8 1/4 cent carry (67% of calculated full commercial carry). As for Wednesday's session, take note of where the Dec contract closes prior to First Notice Day Thursday, as that becomes the target for the March contract in this "Down Escalator" market.

SOYBEANS The soybean market traded lower overnight with contracts sitting at or near session lows early Wednesday morning. Most of the overnight interest seemed to come from noncommercial traders, while commercials remain short-term bearish. The carry in the January-to-March futures spread is strong at 11 3/4 cents, covering 77% of calculated full commercial carry. The spread of interest is the March-to-May as it has slowly made its way out to cover 67% of calculated full commercial carry, the threshold of also being bearish. Technically, Jan beans look vulnerable to a sharp sell-off on its daily chart with initial support at Tuesday's low of $9.87 1/2. A move below this mark could trigger more aggressive noncommercial long-liquidation against an otherwise quiet trade.

WHEAT Winter wheat markets were showing small gains early Wednesday morning, though contracts had slipped back from session highs. Most of the interest seemed to be follow-through from Tuesday's late rally, with the question being is buying activity sustainable over the course of Wednesday's trade. Given the recent move to new contract lows, the answer could be "yes". It would not be surprising to see winter contracts move three days against the prevailing downtrend(s), with Wednesday possibly being Day 2. However, given Tuesday's rally was based on renewed commercial buying interest in Chicago, it would also not be surprising to see that same group selling Wednesday. That's just how things go in wheat's world.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.02	-$0.01	-$0.34	Dec	$0.013
Soybeans:	$9.19	-$0.03	-$0.74	Jan	$0.003
SRW Wheat:	$3.81	$0.03	-$0.30	Dec	$0.017
HRW Wheat:	$3.60	$0.04	-$0.49	Dec	$0.017
HRS Wheat:	$5.83	-$0.04	-$0.20	Dec	$0.024

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

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

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