DTN Early Word Grains
Not a Creature Was Stirring
March corn was fractionally higher, March soybeans were fractionally lower, and March Chicago (SRW) wheat was unchanged.
CME Globex Recap:The grain and oilseed complex was quiet overnight, almost as if being tucked in for a long winter's nap. Contracts were generally within a few ticks of Monday's closed. Other commodity sectors were mostly higher cotton, silver, and cocoa the few in the red. The U.S. dollar index was under pressure while DJIA futures continue to rally.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 140.46 points (0.6%) higher at 24,792.20, the NASDAQ Composite gained 58.18 points (0.8%) to 6,994.76, and the S&P 500 added 14.35 points (0.5%) to 2,690.16 Monday. DJIA futures were 28 points higher early Tuesday morning. Asian markets closed mostly higher with Japan's Nikkei 225 down 33.77 points (0.1%), Hong Kong's Hang Seng gaining 203.25 points (0.7%), and China's Shanghai Composite adding 28.62 points (0.9%). European markets were trading mixed with London's FTSE 100 up 15.76 points (0.2%), Germany's DAX down 12.17 points (0.1%), and France's CAC 40 off 6.08 points (0.1%). The euro gained 0.0029 to 1.1811 as the U.S. dollar index lost 0.14 to 93.56. March 30-year T-Bonds were 1/32 higher at 153'07 while February gold gained $1.10 to $1,266.60. January bitcoin (CME) was $600 lower at $18,500. Crude oil was $0.34 higher at $57.50 while Brent crude added $0.34 to $63.75. China's Dalian soybean futures were mostly higher and Malaysian palm oil futures were mostly lower overnight.
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| BULL | BEAR | ||
| 1) | From a technical point of view, corn is sharply oversold short-term | 1) | Corn contracts remain in sight of new lows early Tuesday morning. |
| 2) | March soybeans are still in position to establish a short-term bullish turn on its daily chart. | 2) | DTN ran a story Monday discussing the Brazilian soybean crop, with key parts of the country looking at the potential for record production. |
| 3) | Continued dryness across the U.S. Southern Plains has helped put the July Kansas City wheat contract in position for a bullish turn on its weekly chart. | 3) | March Chicago wheat continues to struggle with resistance at its 20-day moving average. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN For the third day in a row, March corn hit its contract low of $3.46 1/2. Meanwhile, daily stochastics (short-term technical momentum study) are in single digits indicating a sharply oversold situation. It's possible the noncommercial side of the market could view this as an opportunity to cover some of its large net-short futures position, though maybe not on Tuesday. Recall that this coming Friday's CFTC Commitment of Traders report is for positions held as of Tuesday's (today's) close. Therefore, it isn't without precedent to see this group hold their position until Wednesday. Still, the market looks to be near a short-term low unless it commercial selling extends the downtrends seen on both daily and weekly charts.
SOYBEANS Similar to corn, March soybeans daily chart is showing what looks to be a possible bottoming formation. Overnight trade saw the March contract hold above Monday's low of $9.68 1/4 while daily stochastics (short-term technical momentum study) sit in single digits showing a sharply oversold situation. If the market can find any buying interest at all over the course of Tuesday's session, these same daily stochastics could turn bullish indicating a possible change in short-term trend. Fundamentally, the market has little fresh news to provide a spark, though recent days have seen continued announcements of new export sales and South American weather, particularly in Argentina, remains a question.
WHEAT Winter wheat contracts were within fractions of Monday's close following a quiet overnight session. March Chicago wheat's short-term trend remains up, though the contract is nearing resistance at its 20-day average calculated Tuesday at $4.26 1/2. Fundamentally, new-crop July Kansas City is drawing most of the attention given recent chatter concerning ongoing dryness across much of the U.S. Southern Plains possibly increasing the chances of winter-kill. By my count, these would be the first two cases of the crop dying, needing only 7 or so more before we get to harvest next summer. In all seriousness, July KC is nearing an upturn on its weekly chart having rallied off last week's new contract low of $4.40 1/4 while weekly stochastics (intermediate-term technical momentum study) near a bullish signal indicating the start of a secondary uptrend.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.09 | $0.00 | -$0.38 | Mar | $0.009 |
| Soybeans: | $8.92 | -$0.05 | -$0.69 | Jan | $0.012 |
| SRW Wheat: | $3.84 | $0.03 | -$0.37 | Mar | $0.005 |
| HRW Wheat: | $3.66 | $0.03 | -$0.53 | Mar | $0.017 |
| HRS Wheat: | $5.93 | $0.00 | -$0.26 | Mar | $0.006 |
Darin Newsom can be reached at darin.newsom@dtn.com
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