DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally higher, January soybeans were fractionally lower, and March Chicago (SRW) was 1 cent higher.

CME Globex Recap:

The grain and oilseed complex was quietly mixed early Tuesday morning, while other commodity sectors were mostly higher. The U.S. dollar index was showing a small loss as DJIA futures continued to rally. Energies were mostly higher and metals mostly lower.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 56.87 points (0.2%) higher at 24,836.03, the NASDAQ Composite gained 35.00 points (0.5%) to 6,875.08, and the S&P 500 rallied 8.49 points (0.3%) to 2,659.99 Monday. DJIA futures were 18 points higher early Tuesday morning. Asian markets closed mostly lower with Japan's Nikkei 225 down 72.56 points (0.3%), Hong Kong's Hang Seng off 171.41 points (0.6%), and China's Shanghai Composite losing 41.38 points (1.2%). European markets were trading mostly lower with London's FTSE 100 up 18.94 points (0.2%), Germany's DAX down 3.20 points, and France's CAC 40 adding 8.74 points (0.2%). The euro added 0.0009 to 1.1780 as the U.S. dollar index lost 0.11 to 93.82. March 30-year T-Bonds were 3/32 lower at 152'29 while February gold dropped $1.10 to $1,245.80. January bitcoin was $815 lower at $17,730. Crude oil was $0.31 higher at $58.30 while Brent crude gained $0.95 to $65.64. China's Dalian soybean and Malaysian palm oil futures were both higher overnight.

	BULL		BEAR
1)	Corn's national average basis continues to firm.	1)	Corn's forward curve remains bearish.
2)	It's possible the recent sell-off in soybeans could uncover increased commercial buying interest.	2)	The minor (short-term) downtrend in new-crop November soybeans continues to strengthen.
3)	Winter wheat contracts are in position to possibly establish bullish technical signals this week.	3)	Fundamentally winter wheat remains incredibly bearish.

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 March corn posted a new contract low of $3.48 1/4 during Monday's sell-off. So there's that. Despite being technically oversold on its daily and weekly charts, corn remains in its "down escalator" market meaning each contract falls back to where the previous goes off the board. Late in its delivery period, December 2017 is trading at $3.36. With futures spreads still bearish, the most bullish factor for corn remains its strengthening basis. However, while national average basis firmed by another penny Monday, calculated at 40 cents under the March, it continues to run 10 cents lower than the average of the 4 previous marketing years. Corn could see light support over the course of Tuesday's session, but in the big picture it isn't expected to amount to much. Delivery of another 66 contracts was reported against the December issue, putting the total at 7,374 contracts.

SOYBEANS Soybean futures were fractionally lower overnight into early Tuesday morning. Recent pressure has come from selling from both commercial and noncommercial traders, the latter erasing some of its net-long futures position reported in last Friday's CFTC Commitment of Traders report (as of Tuesday, December 5). In that report, noncommercial traders held a net-long futures position of 92,585 contracts. However, since last Tuesday's close of $10.08 1/2, up 10 cents for the day, January beans have fallen to $9.78 3/4. This coming Friday's reported positions will be as of today's close. Fundamentally the market continues to grow more bearish, with the old-crop forward curve now bearish through the May contract. As with corn, light buying interest could be seen following Monday's sell-off but it isn't expected to be trend changing.

WHEAT Winter wheat contracts were showing small gains early Tuesday, recovering a small part of Monday's sell-off. It's possible, if one squints their eyes just right, that new-crop July contracts could be seen as possibly forming a bullish spike reversal. Both Chicago and Kansas City contracts posted new lows Monday before staging a modest rally. Meanwhile, weekly stochastics are in single-digits showing sharply oversold conditions. Again, it's possible this combination could lead to a bullish reversal, but there's a lot of week left to trade. Delivery of another 15 contracts was reported against the December Chicago issue, putting its total at 5,024 contracts. Delivery of another 29 contracts was reported against the December Kansas City issue, putting its total at 849 contracts.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.09	-$0.03	-$0.40	Mar	$0.010
Soybeans:	$9.10	-$0.07	-$0.72	Jan	$0.003
SRW Wheat:	$3.74	-$0.06	-$0.39	Mar	-$0.004
HRW Wheat:	$3.56	-$0.05	-$0.57	Mar	$0.004
HRS Wheat:	$5.79	-$0.03	-$0.29	Mar	-$0.004

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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