DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally lower, March soybeans were fractionally lower, and March Chicago (SRW) wheat was unchanged.

CME Globex Recap:

Overnight trade in grain and oilseeds was quiet, heading into a holiday shortened Friday session. Markets will reopen Tuesday morning, with little volume expected over the following week. In other words, the complex looks to be tucked in for its long winter's nap. Other commodity markets did little overnight, with softs (including cotton) lower and energies mostly lower. Metals were mixed while the U.S. dollar index and DJIA futures were higher.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 55.64 points (0.2%) higher at 24,782.29, the NASDAQ Composite gained 4.40 points to 6,965.36, and the S&P 500 added 5.32 points (0.2%) to 2,684.57 Thursday. DJIA futures were 26 points higher early Friday morning. Asian markets closed mostly higher with Japan's Nikkei 225 up 36.666 points (0.1%), Hong Kong's Hang Seng gaining 210.95 points (0.7%), and China's Shanghai Composite off 3.00 points. European markets were trading mostly lower with London's FTSE 100 up 5.58 points, Germany's DAX off 12.10 points, and France's CAC 40 down 12.21 points (0.2%). The euro lost 0.0024 to 1.1851 as the U.S. dollar index gained 0.09 to 93.38. March 30-year T-Bonds were 8/32 lower at 150'30 while February gold added $1.50 to $1,272.10. January bitcoin (CME) was $1,030 lower at $14,300. Crude oil was $0.26 lower at $58.10 while Brent crude slipped $0.23 to $64.67. China's Dalian soybean futures were sharply lower while Malaysian palm oil futures were mixed overnight.

	BULL		BEAR
1)	Minor (short-term) uptrends in corn are slowly gaining bullish momentum.	1)	Total marketing year shipments of corn now project to roughly 300 mb less than what USDA is currently guessing.
2)	It's possible old-crop soybeans could post a bullish technical signal on daily charts Friday, but will need some help to do it.	2)	Deferred soybean futures spreads continue to see a stronger carry, reflecting an increasingly bearish longer-term view of fundamentals.
3)	March Chicago wheat finally broke resistance at its 20-day moving average, signaling the short-term uptrend could gain momentum.	3)	Wheat is still wheat meaning its long-term fundamentals remain 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 The corn market was quiet overnight with old-crop March posting a 1 1/4 cent trading range on volume of 6,100 contracts. Heading into Friday's holiday shortened session corn contracts have established minor (short-term) uptrends on daily charts and need a higher close Friday to do the same on secondary (intermediate-term) weekly charts. Fundamentally there remains little to get excited about following Thursday's weekly export sales and shipment numbers (for the week ending Thursday, December 14). Marketing year shipments, through a week ago Thursday, project total demand in the neighborhood of 1.625 bb. This would fall about 300 mb short of USDA's current projection if realized at the end of next August. However, there are signs demand could be picking up, as it seasonally does, with both March-to-May and May-to-July futures spreads stabilizing. In fact, if one holds their eyes just right while looking at the March-to-May weekly close chart one could argue that an uptrend (period of weakening carry) is forming.

SOYBEANS Looking at the daily chart for March soybeans it's actually difficult to see the contract moving much lower. Daily stochastics (short-term momentum study) are deep in single digits, indicating a sharply oversold situation. However, go lower the contract did as it posted a new low for this sell-off of $9.57 1/4 overnight. It's possible, possible mind you, that the contract could see a short-term bullish reversal if it rallies to take out Thursday's high of $9.67 1/2 and closes higher for the day. If Friday's session sees low volume, as expected, such a move could be seen if a large enough set of noncommercial buy orders come in. Fundamentally the market remains bearish with deferred futures spreads trending down (strengthening carry) on weekly close-only charts. Thursday's round of weekly export sales and shipment numbers (for the week ending Thursday, December 14) showed total marketing year shipments of 950 mb, a figure that projects to total demand through next August of 1.980 bb.

WHEAT Thursday's session finally saw March Chicago wheat move above resistance at its 20-day moving average of $4.25, and more importantly close above that level. This should allow the contract to extend its minor (short-term) uptrend, signaling continued noncommercial short-covering supported by commercial buying interest. Similarly, the secondary (intermediate-term) uptrend seen on July Kansas City wheat's weekly chart is also gaining momentum. There the contract has an initial upside target of $4.83, with support expected to be tied to ongoing dry conditions across much of the U.S. Southern Plains growing area.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.14	$0.02	-$0.37	Mar	$0.000
Soybeans:	$8.80	-$0.06	-$0.69	Jan	-$0.004
SRW Wheat:	$3.90	$0.04	-$0.37	Mar	$0.001
HRW Wheat:	$3.71	$0.02	-$0.53	Mar	-$0.002
HRS Wheat:	$5.91	-$0.02	-$0.26	Mar	-$0.009

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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