DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally higher, January soybeans were 2 cents higher, and March Chicago (SRW) was 2 cents higher.

CME Globex Recap:

Commodities in general were showing green early Wednesday morning. Grains and oilseeds, after being pummeled again Tuesday, are generally oversold from a technical point of view and in need of a rally, no matter how small. The U.S. dollar index was down, slightly, while DJIA futures rallied once again.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 118.77 points (0.5%) higher at 24,504.80, the NASDAQ Composite lost 12.76 points (0.2%) to 6,862.32, and the S&P 500 rallied 4.12 points (0.1%) to 2,665.11 Tuesday. DJIA futures were 12 points higher early Wednesday morning. Asian markets closed mostly higher with Japan's Nikkei 225 down 108.10 points (0.5%), Hong Kong's Hang Seng up 428.22 points (1.5%), and China's Shanghai Composite adding 22.22 points (0.7%). European markets were trading mostly lower with London's FTSE 100 up 2.02 points, Germany's DAX down 22.69 points (0.2%), and France's CAC 40 losing 7.29 points (0.1%). The euro added 0.0004 to 1.1746 as the U.S. dollar index slipped 0.09 to 94.00. March 30-year T-Bonds were 5/32 lower at 152'16 while February gold gained $1.60 to $1,243.30. January bitcoin was $240 lower at $17,780. Crude oil was $0.41 higher at $57.55 while Brent crude gained $0.52 to $63.86. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower overnight.

	BULL		BEAR
1)	Fund traders could start to lose interest in selling corn.	1)	March corn posted a bearish outside range on its daily chart Tuesday, possibly triggering another round of selling Wednesday.
2)	The few remaining soybean market bulls could try to keep up the argument of adverse weather in Argentina cutting into production.	2)	The minor (short-term) downtrend in November soybeans has not reached its next downside target yet.
3)	New-crop winter wheat contracts find themselves sharply oversold from a technical point of view.	3)	Wheat, in general, continues to show bearish fundamentals.

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 Corn futures posted a quiet rally overnight, with March showing a 1 1/2-cent trading range on volume (futures only) of 9,500 contract through early Wednesday morning. Tuesday's session saw March corn establish a bearish outside range on its daily chart; meaning the contract traded above the previous day's high, fell to a new (contract) low, and closed lower for the day. This is generally viewed as a bearish technical signal, though it is hard to imagine fund traders are lining up early Wednesday to continue to sell corn. If so, look for the orders to start coming in at the 8:30 am (CT) open. Fundamentally there is little change in the market with the carry in the market's forward curve still bearishly strong. National average basis was unchanged Tuesday evening, with the DTN National Corn Index (national average cash price) calculated at $3.07 3/4, keeping it 40 cents under the close of March futures. Delivery of another 266 contracts was reported against the December issue, putting the total at 7,640 contracts.

SOYBEANS Soybean futures were a couple cents higher early Wednesday morning, finding light buying interest after another solid sell-off Tuesday. The bearish close left both old-crop January and new-crop November in technical oversold positions, on short-term daily charts, with latter closing in on technical price support near $9.91 1/2. While no big burst of buying interest is expected Wednesday, particularly with fundamentals growing increasingly bearish, the market could at least see a slowdown in noncommercial long-liquidation mid-week. This coming Friday's CFTC Commitment of Traders report will show positions as of Tuesday's close, with the noncommercial net-long expected to be trimmed substantially. Fundamentally, market chatter continues to focus on South American weather in general, conditions in Argentina in particular. Though it is only the equivalent of mid-June in the Southern Hemisphere, traders could try to rally the market if Argentina misses the next round of forecasted rains.

WHEAT Winter wheat contracts were showing small gains early Wednesday, recovering most of Tuesday's sell-off. Not much has changed in wheat the last 24 hours, with old-crop fundamentals still bearish and new-crop winter contracts showing sharply oversold (technical) signals. Buyers are few and far between, casting some doubt on whether or not the overnight rally will be able to last throughout Wednesday's session. Still, almost anything is possible meaning wheat has a chance to rally at mid-week, particularly if trade volume is low. Delivery of another 206 contracts was reported against the December Chicago issue, putting its total at 5,230 contracts. Delivery of another 18 contracts was reported against the December Kansas City issue, putting its total at 867 contracts.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.08	-$0.01	-$0.40	Mar	$0.000
Soybeans:	$9.04	-$0.06	-$0.72	Jan	$0.005
SRW Wheat:	$3.72	-$0.02	-$0.38	Mar	$0.010
HRW Wheat:	$3.56	-$0.01	-$0.56	Mar	$0.010
HRS Wheat:	$5.77	-$0.03	-$0.29	Mar	$0.007

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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