DTN Early Word Grains
Another Report Day
March corn was fractionally higher, March soybeans were fractionally higher, and March Chicago (SRW) wheat was fractionally higher.
CME Globex Recap:Friday is USDA January report day, and grains were quietly higher to start. Not that this is any indication of what's to come, but rather a stalemate before the few minutes of excitement after the release of all the numbers later in the session. The U.S. dollar index remains volatile, falling sharply again as it approaches major (long-term) technical support. On the other end of the spectrum, DJIA futures were posting a triple-digit gains hinting at another explosive extension to equities when U.S. equities open at 8:30 (CT).
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 205.60 points (0.8%) higher at 25,574.73, the NASDAQ Composite gained 58.21 points (0.8%) to 7,211.78, and the S&P 500 added 19.33 points (0.7%) to 2,767.56 Thursday. DJIA futures were 110 points higher early Friday morning. Asian markets closed mostly higher with Japan's Nikkei 225 off 56.61 points (0.2%), Hong Kong's Hang Seng up 292.15 points (0.9%), and China's Shanghai Composite adding 3.60 points (0.1%). European markets were trading mostly higher with London's FTSE 100 up 16.94 points (0.2%), Germany's DAX gaining 32.86 points (0.2%), and France's CAC 40 up 18.67 points (0.3%). The euro gained 0.0093 to 1.2126 as the U.S. dollar index fell another 0.57 to 91.33. March 30-year T-Bonds were 4/32 lower at 151'10 while February gold rallied $9.70 to $1,332.20. Crude oil was $0.40 lower at $63.40 while Brent crude lost $0.18 to $69.08. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.
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| BULL | BEAR | ||
| 1) | "Final" corn production for 2017 is expected to come in about 20 mb less than USDA's previous guess. | 1) | Given corn's slow export pace through the first quarter, total demand for 2017-2018 could be expected to decrease by roughly 250 mb. |
| 2) | It's possible the recent sell-off in soybeans has built in a worst case scenario for South American production estimates. | 2) | Most of USDA's numbers are expected to be bearish for U.S. soybeans. |
| 3) | U.S. winter wheat planted acres are expected to come in below last year's low figure. | 3) | December 1 quarterly stocks of all wheat are expected to be large, bearishly so. |
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 COMMENTSCORN Corn contracts were fractionally higher following another quiet overnight session. Old-crop March remains near the mid-point of its sideways trading range at $3.50 1/2 ahead of Friday's USDA reports. This set of data will show quarterly stocks as of December 1, revealing usage over the first quarter of the 2017-2018 marketing year. The December 1 usage number tends to be a solid 31% of what total demand turns out to be when the final quarterly stocks number for the marketing year rolls around next September. Minor adjustments are also expected in 2017 production, a fact that will also alter final projections for demand and ending stocks. Other than that the report doesn't offer much, but just for fun, keep an eye out for adjustments to previous years' "final" production numbers.
SOYBEANS Given USDA's track record of "difficulty" calculating domestic ending stocks numbers, interest in Friday's set of data shouldn't go much further than the December 1 quarterly stocks number. There we see first quarter usage is not as good an indicator of what final total demand should be as corn's Q1 stocks number. Other than that, most of the interest should be on South American production numbers. Technically March soybeans fell to a new low for the move overnight at $9.47 3/4, down 2 1/4 cents before rallying to fractional gains early Friday morning. Delivery of another 63 contracts was reported against the January issue, putting the total at 487 contracts.
WHEAT Winter wheat contracts were fractionally higher overnight, doing little ahead of Friday's USDA reports. This set of data is expected to be a mixed bag for winter wheat with pre-report estimates for all stocks as of December 1 showing a bearish leaning while expectations of another lower winter wheat acreage figure thought to be bullish. Technically new-crop July contracts for both Chicago and Kansas City remain in uptrends on weekly charts, a fact that isn't expected to change following Friday's session.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.15 | -$0.01 | -$0.33 | Mar | -$0.006 |
| Soybeans: | $8.79 | -$0.06 | -$0.71 | Mar | -$0.009 |
| SRW Wheat: | $4.01 | -$0.02 | -$0.32 | Mar | -$0.006 |
| HRW Wheat: | $3.94 | $0.00 | -$0.46 | Mar | $0.000 |
| HRS Wheat: | $6.09 | -$0.05 | -$0.20 | Mar | -$0.002 |
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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