DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was 1 cent higher, January soybeans were 12 cents higher, and March Chicago (SRW) was 3 cents higher.

CME Globex Recap:

Soybeans posted a strong move Sunday night into Monday morning, following-through on last Friday's rally. This provided support to the rest of the grain and oilseed complex, though corn was a quiet follower. Wheat saw renewed buying interest despite a stronger U.S. dollar index while a triple-digit overnight rally in DJIA futures hint at an explosive session in equities to start the week.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 40.76 points (0.2%) lower at 24,231.59, the NASDAQ Composite lost 26.39 points (0.4%) to 6,847.59, and the S&P 500 fell 5.36 points (0.2%) to 2,642.22 Friday. DJIA futures were 211 points higher early Monday morning. Asian markets closed mixed with Japan's Nikkei 225 down 111.87 points (0.5%), Hong Kong's Hang Seng up 64.04 points (0.2%), and China's Shanghai Composite off 8.00 points (0.2%). European markets were trading mostly higher with London's FTSE 100 up 57.64 points (0.8%), Germany's DAX gaining 155.36 points (1.2%), and France's CAC 40 adding 49.90 points (0.9%). The euro dropped 0.0047 to 1.1848 as the U.S. dollar index gained 0.30 to 93.19. March 30-year T-Bonds were 21/32 lower at 152'19 while February gold lost $6.50 to $1,275.9. Crude oil was $0.62 lower at $57.74 while Brent crude slipped $0.48 to $63.25. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower overnight.

	BULL		BEAR
1)	Commercial buying continues to be seen in corn, with basis firming and carry in the market's forward curve weakening.	1)	Weekly export inspections of corn, set for release Monday morning, are expected to show continued slower than needed demand.
2)	Soybean's long-term bullish monthly chart continues to influence daily and weekly activity.	2)	Soybeans' forward curve continues to grow more bearish.
3)	Winter wheat was able to post a solid rally overnight on follow-through buying from last Friday's close.	3)	A strong rally by the U.S. dollar index could limit gains in the wheat complex Monday.

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 Though March corn posted a narrow trading range of about a penny overnight, trade volume (futures only) picked up to 25,600 contract through early Monday morning. The contract still finds itself in a quasi-minor (short-term) uptrend with an initial target up near $3.67. Fundamentally there is little fresh news, nor is there expected to be many headlines over the next few months, with large supplies locked up tight in bins, leading merchandisers to push prices slightly to buy enough to meet demand. Interest this week will turn to activity in the March-to-May futures spread that saw its carry trimmed last week to cover a neutral-to-bearish level of calculated full commercial carry. Also, national average basis firmed last week with the DTN National corn index calculated at $3.14 3/4 Friday evening, putting it 44 cents under the close of March futures. The previous week saw national average basis calculated at 48 3/4 cents under. Delivery of another 1,270 contracts was reported against the December issue, putting the total at 3,760 contracts.

SOYBEANS Soybeans saw solid follow-through buying from last Friday's rally, posting a price gap between Friday's high of $10.07 1/4 and the overnight low of $10.09 1/2. While buying interest remained consistent for much of the overnight session, it will be interesting to see if it can be maintained over the course of Monday's trade given the stronger U.S. dollar. Technically January soybeans look to be approaching a top on both its daily (short-term) and weekly (intermediate-term) charts, with futures spreads still showing a bearish level of carry. While spreads did see some buying overnight, traders will keep a close eye on how carry moves during Monday's session. Weather in South America will still be watched closely as it is the equivalent of early June here in the U.S.

WHEAT Winter wheat contracts were trading higher early Monday morning, supported by the rally in soybeans and follow-through interest from last Friday's bullish close. Technically, the March Chicago contract climbed above its 20-day moving average overnight, with this resistance calculated at $4.40 Monday. The key will be whether or not it can close above this level. If so it could trigger a wave of buying, extending the market's minor (short-term) uptrend. Potential gains during Monday's session could be limited by a strong U.S. dollar index. Delivery of another 437 contracts was reported against the December Chicago issue, putting its total at 3,957 contracts. Delivery of another 27 contracts was reported against the December Kansas City issue, putting its total at 638 contracts.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.15	$0.05	-$0.44	Mar	$0.019
Soybeans:	$9.22	$0.09	-$0.73	Jan	$0.005
SRW Wheat:	$3.97	$0.07	-$0.42	Mar	$0.018
HRW Wheat:	$3.71	$0.07	-$0.67	Mar	$0.006
HRS Wheat:	$6.00	$0.11	-$0.31	Mar	$0.015

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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