DTN Early Word Grains
And Winter has Begun
March corn was 1 cent higher, January soybeans were 3 cents higher, and March Chicago (SRW) was 2 cents higher.
CME Globex Recap:Friday, December 1 is the first day of meteorological winter and grain and oilseed markets seemed to be paying attention to long-term patterns on monthly charts. The complex in general saw solid buying overnight, led by soybeans. Other commodities were mixed with softs lower, energies higher, and metals mostly higher. The U.S. dollar index was under pressure while DJIA futures were off almost 100 points early Friday morning following the latest twist in U.S. tax reform: A delayed Senate vote due to concerns over the deficit. Stay tuned to DTN for up to date coverage.
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The Dow Jones Industrial Average closed 331.67 points (1.4%) higher at 24,272.35, the NASDAQ Composite gained 49.58 points (0.7%) to 6,873.97, and the S&P 500 rallied 21.51 points to 2,647.58 Thursday. DJIA futures were 98 points lower early Friday morning. Asian markets closed mixed with Japan's Nikkei 225 up 94.07 points (0.4%), Hong Kong's Hang Seng down 103.11 points (0.4%), and China's Shanghai Composite adding 0.43 point. European markets were trading lower with London's FTSE 100 down 35.33 points (0.5%), Germany's DAX off 185.81 points (1.4%), and France's CAC 40 losing 61.70 points (1.1%). The euro slipped 0.0001 to 1.1903 as the U.S. dollar index dipped 0.08 to 92.99. March 30-year T-Bonds were 1'1/32 higher at 152'24 while February gold gained $3.20 to $1,279.90. Crude oil was $0.36 higher at $57.76 while Brent crude added $0.46 to $64.09. China's Dalian soybean futures were lower and Malaysian palm oil futures were higher again overnight.
| BULL | BEAR | ||
| 1) | Corn, both futures and cash, posted bullish outside ranges on monthly charts during November. | 1) | Total marketing year shipments of corn continue to run 36% behind last year's pace. |
| 2) | Soybeans' long-term monthly charts, for both futures and cash, are hinting at a build in bullish momentum. | 2) | With fundamentals growing more bearish, soybeans remain vulnerable to continued noncommercial selling. |
| 3) | Cash HRW wheat continues to show a long-term uptrend on its monthly chart. | 3) | The long-term fundamental outlook remains bearish for the wheat complex. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN March corn is nearing a minor (short-term) bullish breakout on its daily chart, with a move beyond $3.58 possibly triggering an extended rally to near $3.67 (for more information on the markets', futures and cash, long-term trends see DTN's updated Technically Speaking blog). Most of the buying overnight continued to come from noncommercial traders as this group covers some of their net-short futures position. As discussed in this commentary for weeks, this remains the most bearish factor in the corn market. Fundamentally corn is still bearish, with Thursday's weekly export shipment update showing a marketing year total of 295 mb (through Thursday, November 23), 36% behind the previous marketing year. Delivery of another 1,286 contracts was reported against the December issue, putting the total at 2,490 contracts.
SOYBEANS Now that the calendar page has turned from November to December, soybeans seem to have found renewed noncommercial buying interest. At least short-term. The January contract wasn't able to quite erase all of Thursday's loss overnight, rallying 5 3/4 cents before pulling back a bit through Friday morning. The move to a new 4-day low Thursday is problematic for the contract as it opens the door to increased bearish momentum once the new month buying interest starts to wane (for more information on the markets', futures and cash, long-term trends see DTN's updated Technically Speaking blog). Fundamentally soybeans have been growing more bearish with both the January-to-March and March-to-May spreads covering a bearish level of calculated full commercial carry. Thursday's weekly export shipment update showed a marketing year total of 775 mb, 13% behind the previous marketing year.
WHEAT Winter wheat markets were higher early Friday morning, supported by continued noncommercial short-covering in Chicago and what looked to be commercial buying in Kansas City (spreads can be skewed by low overnight trade volume). Technically, March Chicago wheat is struggling to build bullish momentum with rallies blocked by the 20-day moving average, calculated Friday at $4.39 3/4 for more information on the markets', futures and cash, long-term trends see DTN's updated Technically Speaking blog). Fundamentally Chicago seems to be losing some of its recent buying interest with the market's forward curve showing a stronger carry Friday morning. Thursday's weekly export shipment update showed a marketing year total of 427.7 mb through Thursday, November 23, 7% behind the previous marketing year. Delivery of another 1,520 contracts was reported against the December Chicago issue, putting its total at 3,520 contracts. Delivery of another 556 contracts was reported against the December Kansas City issue, putting its total at 611 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.10 | $0.03 | -$0.46 | Mar | $0.010 |
| Soybeans: | $9.13 | -$0.06 | -$0.73 | Jan | $0.007 |
| SRW Wheat: | $3.89 | $0.01 | -$0.44 | Mar | $0.029 |
| HRW Wheat: | $3.64 | -$0.02 | -$0.67 | Mar | -$0.017 |
| HRS Wheat: | $5.89 | $0.00 | -$0.33 | Mar | $0.017 |
Darin Newsom can be reached at darin.newsom@dtn.com
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