DTN Early Word Grains
Back to the Grind
March corn was fractionally lower, January soybeans were 5 cents lower, and March Chicago (SRW) was fractionally lower.
CME Globex Recap:Soybeans were under pressure again overnight, losing about a nickel through early Thursday morning. Light spillover pressure was seen in corn, though contracts only posted a 1 cent trading range for the session. Wheat was fractionally higher. Outside commodities were mixed with softs mostly higher, energies mostly lower, and metals showing a strong rally despite Wednesday's interest rate increase by the FOMC. DJJIA futures continue to rally while the U.S. dollar index, surprisingly, was lower.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 80.63 points (0.3%) higher at 24,585.43, the NASDAQ Composite gained 13.48 points (0.2%) to 6,875.80, and the S&P 500 slipped 1.26 points to 2,662.85 Wednesday. DJIA futures were 34 points higher early Thursday morning. Asian markets closed mostly lower with Japan's Nikkei 225 down 63.62 points (0.3%), Hong Kong's Hang Seng off 55.72 points (0.2%), and China's Shanghai Composite losing 10.60 points (0.3%). European markets were trading lower with London's FTSE 100 down 18.20 points (0.2%), Germany's DAX off 72.13 points (0.6%), and France's CAC 40 losing 23.42 points (0.4%). The euro gained 0.0003 to 1.1830 as the U.S. dollar index dipped 0.05 to 93.41. March 30-year T-Bonds were 10/32 lower at 153'12 while February gold gained $9.60 to $1,258.20. January bitcoin was $115 higher at $17,170. Crude oil was $0.01 lower at $56.59 while Brent crude added $0.05 to $62.49. China's Dalian soybean futures were mixed and Malaysian palm oil futures were lower again overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Commercial buying continues to be seen in corn, evident in the firming national average basis and weakening March-to-May futures spread carry. | 1) | Total marketing year shipments of corn are expected to still be running a couple hundred bushels behind pace of projected demand. |
| 2) | New-crop November soybeans are nearing technical support on its daily chart that could bring an end to its short-term downtrend. | 2) | Soybeans' 2017-2018 forward curve continues to grow more bearish. |
| 3) | New-crop winter wheat contracts look to have begun minor (short-term) uptrends. | 3) | Total marketing year export shipments of wheat are expected to still be bearish. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Newsflash: King Corn Comatose! Or something like that, again. As you can tell, corn did next to nothing overnight with old-crop March posting a 1 1/-cent trading range on volume of 5,300 contracts. New-crop December was similar as it moved within a 1 cent range on volume of - wait for it - 400 contracts. Thursday promises to be another grind-it-out kind of day in corn with weekly export sales and shipments (for the week ending Thursday, December 7) not expected to raise the enthusiasm much. For the marketing year through November 30, the pace of corn shipments projected to total shipments of roughly 1.6 bb, well below USDA's projected pace and still below the 4-year average. The silver lining in corn is that the March-to-May spread has seen its carry weaken to 8 1/4 cents, in line with the recent firming of basis, as merchandisers try to buy enough tightly held supplies to meet what demand is out there. Delivery of another 137 contracts was reported against the December issue, putting the total at 7,777 contracts.
SOYBEANS Yes, soybeans are down about a nickel early Thursday morning. Yes, key growing areas of Argentina have seem some rain this week. Yes, noncommercial traders continue to liquidate some of their net-long futures position as futures spreads grow more bearish. But amid all the bearishness there is a possible bullish nugget seen amid the debris: The minor (short-term) downtrend in new-crop November looks to be nearing its end as the contract tests support near $9.91 1/2 (the overnight low through early Thursday was $9.92 3/4). Of course, from a technical point of view, if this support doesn't hold the contract could quickly lose another 10 cents, but what's a dime among friends? Fundamentally the carry in the May-to-July futures spread continues to strengthen, moving out to 9 1/2 cents of 63% of calculated full commercial carry. Recall that roughly 67% is the bearish threshold with some merchandisers looking for that 70% mark to start rolling hedges from May to the July.
WHEAT Winter wheat contracts were fractionally mixed early Thursday morning. And yes, that's just as exciting of an overnight session as it sounds. Traders aren't expecting much from Thursday weekly export sales and shipment update (for the week ending Thursday, December 7), with all wheat shipments still projecting a meager sub-900 mb total marketing year shipment number. While technically new-crop July Chicago is hinting at a possible minor (short-term) uptrend on its daily chart, it doesn't seem to have the fundamental backing to extend much of a rally. Delivery of another 20 contracts was reported against the December Chicago issue, putting its total at 5,250 contracts. Delivery of another 97 contracts was reported against the December Kansas City issue, putting its total at 964 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.10 | $0.02 | -$0.39 | Mar | $0.007 |
| Soybeans: | $9.08 | $0.04 | -$0.72 | Jan | $0.003 |
| SRW Wheat: | $3.79 | $0.06 | -$0.38 | Mar | $0.000 |
| HRW Wheat: | $3.61 | $0.05 | -$0.56 | Mar | -$0.001 |
| HRS Wheat: | $5.84 | $0.07 | -$0.29 | Mar | $0.001 |
Darin Newsom can be reached at darin.newsom@dtn.com
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