DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was fractionally lower, March soybeans were 3 cents higher, and March Chicago (SRW) wheat was 1 cent lower.

CME Globex Recap:

Soybeans were higher again overnight, while corn and wheat markets were quietly mixed. Corn found itself fractionally lower again early Wednesday morning, unable to find spillover buying interest from the oilseed complex. Other commodities were mixed with softs mostly higher, energies mostly lower and metals mostly higher. The U.S. dollar index was lower while DJIA futures traded higher.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 7.85 points lower at 24,746.21, the Nasdaq Composite lost 23.71 points (0.3%) to 6,936.36, and the S&P 500 dipped 2.84 points (0.1%) to 2,680.50 Tuesday. DJIA futures were 13 points higher early Wednesday morning. Asian markets closed mostly higher with Japan's Nikkei 225 up 18.52 points, Hong Kong's Hang Seng gaining 19.65 points, and China's Shanghai Composite off 30.34 points (0.9%). European markets were trading mostly higher with London's FTSE 100 up 15.43 points (0.2%), Germany's DAX gaining 10.83 points, and France's CAC 40 up 4.91 points. The euro added 0.0023 to 1.1881 as the U.S. dollar index lost 0.20 to 93.10. March 30-year T-Bonds were unchanged at 151'20 while February gold gained $3.10 to $1,290.60. January bitcoin (CME) was $90 lower at $15,695. Crude oil was $0.40 lower at $59.57 while Brent crude lost $0.74 to $66.28. China's Dalian soybean futures were lower while Malaysian palm oil futures were higher overnight.

	BULL		BEAR
1)	Light spillover buying from soybeans could support corn Wednesday.	1)	Tuesday's weekly export inspections (for the week ending Thursday, Dec. 21) corn demand running well behind expectations.
2)	Old-crop March soybeans posted bullish technical signals Tuesday, indicating its short-term trend has turned up.	2)	Soybeans are in the process of establishing bearish long-term technical patterns on monthly charts.
3)	Below normal temperatures across the U.S. Southern Plains could spark light buying interest in new-crop Kansas City wheat.	3)	Pressure could continue in old-crop Chicago wheat, limiting buying interest in new-crop Kansas City.

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 This may shock you, and if so I apologized in advance, but the corn market was quiet overnight. Old-crop market posted a half-cent trading range (yes, a 1/2-cent range) on volume (futures only) of 3,100 contracts. Technically, March corn remains in a minor (short-term) uptrend on its daily chart, finding resistance near $3.53 1/2. This price marks the 50% retracement level of the previous sell-off from $3.60 1/2 to $3.46 1/2. New-crop December corn is similar in that it too posted a 1/2-cent trading range on low trade volume, all while maintaining the semblance of a minor uptrend on its daily chart. Wednesday's session is expected to stay quiet, even if soybeans start to extend its overnight rally.

SOYBEANS As discussed Tuesday in this space, soybean contracts (both old-crop and new-crop) established minor (short-term) uptrends on their daily charts. Furthermore, old-crop March left a bullish breakaway gap between Friday's high of $9.62 3/4 and Tuesday's low of $9.63. For now, most of the buying has been tied to noncommercial traders while futures spreads trade flat at bearish levels of carry. However, DTN's Todd Hultman noted following last Friday's CFTC Commitment of Traders report (legacy, futures only) that the commercial classification had moved back to a net-long futures position of 29,127 contracts (as of Tuesday, Dec. 19). The previous CFTC CoT report had this same group holding a net-short futures position of 14,955 contracts. Fundamentally, there is little fresh news as traders continue to watch South American weather maps.

WHEAT Winter wheat markets were mixed early Wednesday morning following a quiet overnight session. Chicago (SRW) futures were fractionally lower while Kansas City (HRW) were fractionally mixed. Support, if one wants to call it that, in new-crop Kansas City continues to be tied to the lack of precipitation combined with below normal temperatures across the U.S. Southern Plains. Meanwhile, from a technical point of view, the July Kansas City contract remains in an uptrend on its weekly chart, though Tuesday's lower trade was disappointing. Support is still seen at the contract low of $4.40 1/4 while the initial upside target is up near $4.83 1/2.

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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