DTN Early Word Grains

Mixed Morning

6:00 a.m. CME Globex:

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

CME Globex Recap:

The grain and oilseed complex was mixed early Wednesday morning with soybeans lower, corn fractionally higher, Chicago wheat fractionally lower, Kansas City unchanged, and Minneapolis wheat fractionally higher. Outside sectors were just as confusing with energies mostly lower, metals mostly higher, and softs mixed. Both the U.S. dollar index and DJIA futures were showing gains.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 10.33 points lower at 25,792.86, the NASDAQ Composite lost 37.38 points (0.5%) to 7,223.69, and the S&P 500 dipped 9.82 points (0.3%) to 2,776.42 Tuesday. DJIA futures were 137 points higher early Wednesday morning. Asian markets closed mixed with Japan's Nikkei 225 down 83.47 points (0.3%), Hong Kong's Hang Seng gaining 78.86 points (0.3%), and China's Shanghai Composite adding 8.08 points (0.2%). European markets were trading mostly lower with London's FTSE 100 off 14.02 points (0.2%), Germany's DAX losing 25.32 points (0.2%), and France's CAC 40 down 7.25 points (0.1%). The euro lost 0.0026 to 1.2232 as the U.S. dollar index rallied 0.18 to 90.65. March 30-year T-Bonds were 4/32 lower at 150'22 while February gold added $0.60 to $1,337.70. Crude oil was $0.33 lower at $63.40 while Brent crude lost $0.47 to $68.68. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

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BULL BEAR
1) A bullish factor for corn: All I've got is contracts are holding above recent lows. 1) Corn's fundamentals are bearish. That's it. The overriding factor of the market if not the entire grain and oilseed sector.
2) Soybean contracts continue to show minor (short-term) uptrends on daily charts. 2) U.S. soybean exports remain a concern, as discussed by DTN's Todd Hultman in his latest column "For U.S. Soybean Growers, Trade War is Here".
3) New-crop July winter wheat contracts are holding above recently established lows. 3)

Improved weather over U.S. winter wheat growing areas could put pressure on both Kansas City and Chicago markets.

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 Wednesday is just another quiet morning for corn following an overnight session that saw old-crop March post a trading range of less than 1 cent. However, this lack of range occurred with trade volume (futures only) climbing to 13,700 contracts. Corn is just struggling to go anywhere, still, due in large part to its bearish fundamental situation. Both the March-to-May and May-to-July futures spreads are sitting at bearish levels of calculated full commercial carry while the carry in the new-crop forward curve remains neutral. Technically contracts continue to consolidate above Friday's post-report lows, lacking any incentive to move higher or lower at this time. Given this scenario it's hard to say what direction Wednesday's session could ultimately take. Look for traders to continue to monitor South American weather developments while sitting on the sidelines.

SOYBEANS After posting bullish short-term technical signals the last two days, soybean contracts pulled back a bit overnight through early Wednesday morning. New-crop November continues to find resistance near $9.89, a price that marks the 38.2% retracement level of its previous minor downtrend from $10.24 through last Friday's low of $9.67 1/2 on its daily chart. Though Tuesday saw the contract spike to a high of $9.91 1/4, above its previous spike high of $9.90 3/4, it was unable to close at that level. Wednesday could see the contract pull back a bit, particularly with a lack of fresh news to provide support. Traders will continue to monitor South American weather developments, though these aren't expected to spark much of a move one way or the other during Wednesday's session.

WHEAT Winter wheat markets were unchanged to fractionally lower early Wednesday morning, or in other words, quiet. The key to market action over the latter part of this week could be weather, with both the U.S. Southern Plains (HRW) and Midwest (SRW) growing regions finally forecast to see warming temperatures. Precipitation remains a problem, particularly for HRW wheat, with little expected to be seen through the weekend. Traders will also keep an eye on weather in Russia and Ukraine, where a recent round of warmer than normal winter weather has turned back to cold, with winter wheat there largely unprotected by snow cover. Recent observations from the area talked of how parts of the growing area saw its crop fooled out of dormancy, a situation that has been seen a number of times in the U.S. Southern Plains over the years. Technically markets look to be stalemated at this time, with both new-crop July contracts holding above contract lows.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.16 $0.03 -$0.32 Mar $0.007
Soybeans: $9.00 $0.10 -$0.69 Mar $0.023
SRW Wheat: $3.86 -$0.03 -$0.31 Mar $0.006
HRW Wheat: $3.77 -$0.04 -$0.45 Mar $0.004
HRS Wheat: $5.91 -$0.01 -$0.20 Mar $0.004

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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