DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was 1 cent lower, January soybeans were 7 cents lower, and March Chicago (SRW) was 5 cents lower.

CME Globex Recap:

The highlight of the overnight session was the launch of bitcoin futures on the CME's Chicago Board Options Exchange. The crypto-currency didn't disappoint its enthusiasts, posting a $3,850 range through its first morning of trade, or roughly 22% of its value. The equivalent in corn would be a 75-cent range. Just in case you were wondering, that didn't happen overnight. The grain and oilseed complex started lower and stayed lower through early Monday morning led by soybeans. Other commodity sectors were mixed.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 117.68 points (0.5%) higher at 24,329.16, the NASDAQ Composite gained 27.24 points (0.4%) to 6,840.08, and the S&P 500 rallied 14.52 points (0.5%) to 2,651.50 Friday. DJIA futures were 50 points higher early Monday morning. Asian markets closed higher with Japan's Nikkei 225 up 127.65 points (0.6%), Hong Kong's Hang Seng rallying 325.44 points (1.1%), and China's Shanghai Composite adding 32.20 points (1.0%). European markets were trading mostly higher with London's FTSE 100 up 49.04 points (0.7%), Germany's DAX gaining 19.68 points (0.2%), and France's CAC 40 off 1.70 points. The euro rallied 0.0025 to 1.1798 as the U.S. dollar index fell 0.12 to 93.78. March 30-year T-Bonds were 8/32 higher at 153'04 while February gold gained $4.10 to $1,252.50. Crude oil was $0.26 lower at $57.10 while Brent crude dipped $0.10 to $63.30. China's Dalian soybean futures were mostly lower and Malaysian palm oil futures were lower overnight.

	BULL		BEAR
1)	Corn's national average basis firmed by about 3 cents last week.	1)	Corn's national average basis continues to run 10 cents below the 4-year average.
2)	It's possible weekly soybean export inspections could come in bullish for soybeans.	2)	New-crop November soybeans have a solid short-term downtrend in place on its daily chart.
3)	The most bullish aspect of the wheat market is that, from a technical point of view, winter markets are sharply oversold.	3)	New-crop July contracts of both Chicago and Kansas City wheat posted new lows overnight. A fine way to start the week.

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 Let's just say March corn wasn't bitcoin overnight, and leave it at that. The sloth of commodities posted a trading range of 1 1/4 cents on trade volume of 8,100 contracts through early Monday morning, as it slowly eroded back to trendline support calculated at $3.49 3/4. The overnight low was $3.51, as of this writing. Technically there isn't much new to report short-term (for analysis of corn's weekly charts, see the weekend update of DTN's Technically Speaking blog). Fundamentally corn continues to show a bearish forward curve for 2017-2018 while national average basis firms. Friday's DSTN National Corn Index was calculated at $3.11 3/4, putting it 41 cents under the close of the March futures contract. The previous Friday saw national average basis calculated at 44 cents under the March. Delivery of another 39 contracts was reported against the December issue, putting the total at 7,308 contracts.

SOYBEANS Soybeans aren't bitcoin, as buyers seem to be turning away from the oilseed in droves. Overnight trade saw Jan beans fall 7 cents, sitting near the session low early Monday morning. Technically the most significant short-term story is the minor downtrend established on the November 2018 daily chart last week, with next support pegged near $9.91 1/2 (for analysis of soybeans' weekly charts, see the weekend update of DTN's Technically Speaking blog). Fundamentally the market's forward curve is bearish through the May 2018 contract while national average basis continues to run more than 20 cents below average. Friday's DTN National Soybean Index (national average cash price) was calculated at $9.17 putting it 72 3/4 cents under the close of the January futures contract. The 4-year average comes in at 50 1/2 cents under for last week.

WHEAT Winter wheat contracts are certainly not bitcoin. Because they are wheat they will most likely find a way to show a strong negative correlation against the crypto-currency. Why? As I said, it's wheat. Winter contracts were lower overnight into Monday morning with new crop July issues for both Chicago and Kansas City hitting new contract lows (for analysis of wheat's weekly charts, see the weekend update of DTN's Technically Speaking blog). Fundamentally the market is bearish long-term, as indicated by the strong carry in the forward curves for both Chicago and Kansas City. Delivery of another 285 contracts was reported against the December Chicago issue, putting its total at 5,009 contracts. No contracts were reported delivered against the December Kansas City issue, leaving its total at 820 contracts.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.12	$0.01	-$0.41	Mar	$0.002
Soybeans:	$9.17	-$0.02	-$0.73	Jan	-$0.002
SRW Wheat:	$3.80	-$0.03	-$0.39	Mar	-$0.001
HRW Wheat:	$3.61	-$0.02	-$0.57	Mar	$0.007
HRS Wheat:	$5.82	$0.00	-$0.29	Mar	-$0.006

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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