DTN Early Word Grains

Falling Away

6:00 a.m. CME Globex:

March corn was fractionally lower, January soybeans were 7 cents lower, and March Chicago (SRW) was fractionally lower.

CME Globex Recap:

Soybeans continue to quickly erase gains seen earlier in the week, following through on Wednesday's sell-off with more losses overnight. Corn and Chicago wheat were fractionally lower, while Kansas City and Minneapolis wheat showed quiet gains. Outside markets were mixed buying seen in the energy complex and selling once again in metals.


The Dow Jones Industrial Average closed 39.73 points (0.2%) lower at 24,140.91, the NASDAQ Composite gained 14.16 points (0.2%) to 6,776.38, and the S&P 500 fell 0.30 point to 2,629.27 Wednesday. DJIA futures were 6 points higher early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei 225 up 320.99 points (1.5%), Hong Kong's Hang Seng rallying 78.39 points (0.3%), and China's Shanghai Composite losing 21.91 points (0.7%). European markets were trading mostly higher with London's FTSE 100 off 0.61 point, Germany's DAX gaining 47.28 points (0.4%), and France's CAC 40 up 10.18 points (0.2%). The euro fell another 0.0018 to 1.1779 as the U.S. dollar index rallied 0.21 to 93.73. March 30-year T-Bonds were 8/32 lower at 153'26 while February gold lost $8.30 to $1,257.80. Crude oil was $0.29 higher at $56.25 while Brent crude added $0.46 to $61.68. China's Dalian soybean futures were sharply lower while Malaysian palm oil futures were lower overnight.

1) On its daily chart, March corn has posted a series of higher highs and higher lows. So there's that. 1) 2017-2018 marketing year corn spreads continue to grow more bearish.
2) It's possible another big week of soybean export shipments (for the week ending Thursday, November 30) could be seen in Thursday's weekly update. 2) Soybeans are threatening to turn bearish technically.
3) The most bullish thing about wheat is...I'll get back to you later. 3) July Kansas City wheat posted a new contract low of $4.50, and is in position to establish a bearish outside range on its weekly chart.

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CORN Corn was lower overnight, most likely on spillover pressure from soybeans. Technically the market hasn't changed much with March corn in a minor (short-term) sideways trend between $3.48 3/4 and $3.60 1/2 with a mid-range near $3.54 1/2. However, recent activity has seen a series of higher highs and higher lows, hinting at the possibility of the market working higher at some point. Fundamentally there is also little change with the market anticipating another so-so weekly export sales and shipment update (for the week ending Thursday, November 30). 2017-2018 marketing year futures spreads continue to cover a bearish level of calculated full commercial carry while national average basis continues to firm though still running roughly a dime below the 4-year average. Delivery of another 796 contracts was reported against the December issue, putting the total at 6,805 contracts.

SOYBEANS The soybean market was lower overnight with January falling back to within sight of Wednesday's low at $9.95. After posting a bullish gap between last Friday's high and Sunday night through Monday's low, the contract has fallen back to within 2 cents of last Friday's settlement. This is nearly 19 cents off the high for the week of $10.15. As discussed in this space numerous times, the divergence between the continued rally in futures and downtrend (strengthening carry) in futures spreads left the market vulnerable to a sell-off. Fundamentally there isn't expected to be much fresh news in Thursday's weekly export sales and shipment update (for the week ending Thursday, November 30). Traders will continue to watch weather developments in South America, most notably Argentina. However, if noncommercial traders ramp up selling interest again Thursday there isn't much left in the market at this time to apply the brakes.

WHEAT Winter wheat contracts were fractionally mixed early Thursday with Chicago lower on spillover pressure from corn and soybeans while Kansas City was quietly higher. There is little change in the winter wheat's fundamentals, with another uninteresting weekly export sales and shipment update (for the week ending Thursday, November 30) set for release Thursday morning. Technically the most telling development in winter wheat is the bearish outside week forming in new-crop Kansas City July, with the contract posting a new low of $4.50 this week. Delivery of another 90 contracts was reported against the December Chicago issue, putting its total at 4,699 contracts. Delivery of another 1 contract was reported against the December Kansas City issue, putting its total at 815 contracts.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.11 $0.00 -$0.42 Mar $0.007
Soybeans: $9.30 -$0.06 -$0.73 Jan $0.002
SRW Wheat: $3.86 -$0.06 -$0.39 Mar $0.015
HRW Wheat: $3.65 -$0.07 -$0.58 Mar $0.014
HRS Wheat: $5.84 -$0.13 -$0.30 Mar -$0.001

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

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