DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was 1 cent higher, March soybeans were 5 cents higher, and March Chicago (SRW) wheat was 3 cents lower.

CME Globex Recap:

Soybeans stayed strong from last week's late rally, holding momentum over the three-day holiday weekend to trade higher Monday night into Tuesday morning. Corn was also trading higher, though wheat markets were unable to hold initial gains and had fallen back into the red. The U.S. dollar index was active Monday, posting a sharp sell-off that provided initial support to commodities in general. However, the overnight session lengthened light buying interest returned, sending commodity sectors back down. DJIA futures were screaming higher, pointing to another strong day in the stock markets.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 228.46 points (0.9%) higher at 25,803.19, the NASDAQ Composite gained 49.28 points (0.7%) to 7,261.06, and the S&P 500 added 18.68 points (0.7%) to 2,786.24 Friday. DJIA futures were 234 points higher early Tuesday morning. Asian markets closed mostly higher with Japan's Nikkei 225 up 236.93 points (1.0%), Hong Kong's Hang Seng gaining 565.88 points (1.8%), and China's Shanghai Composite adding 26.11 points (0.8%). European markets were trading mostly higher with London's FTSE 100 up 9.35 points (0.1%), Germany's DAX gaining 143.09 points (1.1%), and France's CAC 40 adding 25.81 points (0.5%). The euro lost 0.0056 to 1.2208 as the U.S. dollar index rallied 0.31 to 90.77. March 30-year T-Bonds were 14/32 higher at 150'30 while February gold fell $1.60 to $1,333.30. Crude oil was $0.45 lower at $63.85 while Brent crude lost $0.98 to $69.28. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

	BULL		BEAR
1)	Spillover buying from soybeans could support corn through the early part of Tuesday's session.	1)	Corn's December 1 quarterly stocks number of 12.516 bb creates a bearish marketing year situation for the market.
2)	Soybean contracts posted bullish short-term technical signals last Friday.	2)	USDA upped its guess on world ending stocks of soybeans in last Friday's January WASDE.
3)	Despite recent pressure, new-crop winter wheat contracts continue to show uptrends on weekly charts.	3)	Domestic winter wheat planted acres came in larger than expected in last Friday's USDA report.

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 Corn contracts were higher overnight into Tuesday morning as the market stabilized following Friday's sell-off. As discussed in Friday's Newsom on the Market column (What's in Store: Corn), last Friday's USDA reports weren't bullish for the corn market fundamentally, with Dec 1 stocks of 12.516 bb pointing to a larger 2017-2018 carryout (2.663 bb) than USDA's latest guess of 2.477 bb. Much will depend on export demand, meaning traders will keep a close eye on this Friday's weekly export shipment update (delayed one day due to Monday's holiday). Technically the most significant news to come out of last week was the DTN National Corn Index establishing a downtrend on its weekly chart (for more information, see the Technically Speaking blog on DTN weekend update).

SOYBEANS Soybean contracts were able to build on last Friday's bullish technical signals, leaving bullish price gaps on the open Monday night and holding gains through early Tuesday (for more information, see DTN's Technically Speaking blog updated later in the morning). Fundamentally, not much more is known about soybeans after USDA's January reports than before, with a long list of question marks still facing the market. Of chief concern is South American weather, though the market is now rallying despite reports of rainfall across much of Argentina over the three-day holiday (U.S. markets) weekend. How large Brazil's crop is remains a debate as well, with USDA upping its guess to 110 mmt in last Friday's WASDE report. Then there's export demand, meaning analysts will keep a close eye on this coming Friday's (delayed one day due to Monday's holiday) weekly export shipment update (for the week ending Thursday, January 11). Delivery of another 177 contracts was reported against the January issue, putting the total at 664 contracts.

WHEAT Winter wheat contracts started the overnight session higher, but were unable to hold gains through early Tuesday morning. Kansas City showed larger losses than Chicago, buy about a penny, with pressure possibly tied to forecasts for warmer temperatures across the U.S. Southern Plains later this week. The question, though, remains a lack of moisture in general and how much damage may have been done to the crop during the bitter cold snap over the recent holiday season. Those that know wheat know it is too early to tell, with traders erasing much of the recent gains in new-crop July contracts for both Kansas City and Chicago. Technically, if both can hold contract lows their respective weekly charts will continue to show secondary (intermediate-term) uptrends (for more information, see the weekend update of the Technically Speaking blog on DTN).

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.14	-$0.02	-$0.33	Mar	$0.007
Soybeans:	$8.90	$0.11	-$0.71	Mar	$0.002
SRW Wheat:	$3.89	-$0.12	-$0.32	Mar	$0.006
HRW Wheat:	$3.80	-$0.13	-$0.46	Mar	$0.005
HRS Wheat:	$5.92	-$0.16	-$0.21	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

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.