DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally higher, March soybeans were 1 cent higher, and March Chicago (SRW) wheat was 4 cents higher.

CME Globex Recap:

The grain and oilseed complex was higher overnight into Monday morning, beginning what is normally a quiet two-week period to end the year. Wheat was the overnight leader, not surprising given its recent bullish technical turn. Commodities in general got an assist from a lower U.S. dollar index while DJIA futures powered to a triple-digit gain.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 143.08 points (0.6%) higher at 24,651.74, the NASDAQ Composite gained 80.06 points (1.2%) to 6,936.58, and the S&P 500 added 23.80 points (0.9%) to 2,675.81 Friday. DJIA futures were 124 points higher early Monday morning. Asian markets closed higher with Japan's Nikkei 225 up 348.55 points (1.6%), Hong Kong's Hang Seng gaining 202.30 points (0.7%), and China's Shanghai Composite adding 1.79 points. European markets were trading higher with London's FTSE 100 up 31.41 points (0.4%), Germany's DAX gaining 187.12 points (1.4%), and France's CAC 40 up 64.81 points (1.2%). The euro gained 0.0048 to 1.1795 as the U.S. dollar index fell 0.22 to 93.71. March 30-year T-Bonds were 10/32 lower at 153'31 while February gold gained $3.90 to $1,261.40. January bitcoin was $1,125 higher at $19,230. Crude oil was $0.31 higher at $57.61 while Brent crude added $0.22 to $63.45. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower overnight.

	BULL		BEAR
1)	Last Friday's CFTC Commitment of Traders report (through Tuesday, December 12) showed noncommercial interests increasing their net-short futures position opening the door to a larger round of year-end covering.	1)	Fundamentally, corn's 2017-2018 futures spreads remain bearish and could continue to limit buying interest.
2)	Old-crop, new-crop, and cash soybeans all look to be nearing a possible short-term bullish turn on daily charts.	2)	Weekly charts for soybeans grew more bearish last week and could trump potential bullish short-term signals this week.
3)	Winter wheat contracts could continue to build on last week's short-term bullish technical signals.	3)	Winter wheat is still bearish fundamentally meaning the small ongoing rally could spark increased selling interest.

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 Shortly after midnight (CT) Monday morning, March corn equaled its contract low of $3.46 1/2. This move sparked a round of buy orders, bumping the contract up more than a cent off its low and helping overnight trade volume climb to 11,300 contracts. From a technical point of view, March corn continues to hint at a possible turn to uptrends on both its daily (short-term) and weekly (intermediate-term) charts. The minor (short-term) turn could come as soon as Monday's close, if the contract is able to finish the day near its session high. Short-term resistance continues to be seen at its previous low of $3.48 3/4. Fundamentally, not much is expected to change over the next couple of weeks though traders will continue to monitor South American weather forecasts.

SOYBEANS Technically, soybeans (both cash and futures) are a messy combination of trend signals. While the weekly chart for the DTN National Soybean Index (NSI.X, national average cash price) shows a clear move to a secondary (intermediate-term) downtrend, complete with a bearish breakaway gap last week, its daily chart shows the minor (short-term) downtrend could soon come to an end. Meanwhile its major (long-term) monthly chart shows a continued consolidation pattern within an uptrend that began back in March 2016. And if you find all that confusing, it's actually a clearer picture than what futures are showing at this time. The more heavily traded old-crop March contract, could establish bullish reversals Monday if they can trade above their respective Friday highs of $9.83 1/4 and $9.92 1/2 and close higher for the day. This combined with expected bullish signals in daily stochastics (short-term momentum studies) would indicate the establishment of new minor (short-term) uptrends on daily charts.

WHEAT Winter wheat contracts were higher early Monday morning, continuing to build on bullish short-term technical signals established last week. With minor uptrends trying to strengthen, due mostly to noncommercial short-covering rather than increased commercial buying, resistance in the March Chicago contract continues to be seen at its 20-day moving average, calculated Monday at $4.27 1/2. While it would seem to be a stretch of the imagination to think March Chicago could gain another 5 cents to test this mark during the day session, low volume trade leaves the door open to spikes. Still, a test of this resistance is more likely to be seen Tuesday if not Wednesday. Traders will keep an eye on the falling U.S. dollar index as possible fodder for continued noncommercial buying.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.08	-$0.01	-$0.39	Mar	$0.004
Soybeans:	$8.97	$0.00	-$0.70	Jan	$0.008
SRW Wheat:	$3.81	$0.01	-$0.37	Mar	$0.006
HRW Wheat:	$3.63	$0.00	-$0.55	Mar	$0.010
HRS Wheat:	$5.93	$0.04	-$0.27	Mar	$0.014

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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