DTN Early Word Grains

Switcheroo Wednesday

6:00 a.m. CME Globex:

March corn was 1 cent higher, March soybeans were 4 cents lower, and March Chicago (SRW) wheat was 1 cent higher.

CME Globex Recap:

Early Wednesday morning finds the grain and oilseed complex switched from early Tuesday with soybeans lower while corn and wheat traded higher. Hardest hit was the March soybean contract, pressured in part by overnight selling in soybean meal. Other commodity sectors were mostly higher with gold posting a double-digit rally and crude oil showing small gains. The U.S. dollar was weaker against other currencies, again, with the index showing a solid loss.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 3.79 points lower at 26,210.81, the NASDAQ Composite gained 52.26 points (0.7%) to 7,460.29, and the S&P 500 added 6.16 points (0.2%) to 2,839.13 Tuesday. DJIA futures were 58 points higher early Wednesday morning. Asian markets closed mostly higher with Japan's Nikkei 225 down 183.37 points (0.8%), Hong Kong's Hang Seng up 27.99 points, and China's Shanghai Composite gaining 12.96 points (0.4%). European markets were trading mostly higher with London's FTSE 100 down 17.60 points (0.2%), Germany's DAX up 4.98 points, and France's CAC 40 rallying 2.21 points. The euro was 0.0036 higher at 1.2334 as the U.S. dollar index fell 0.40 to 89.70. March 30-year T-Bonds were 5/32 lower at 149'02 while February gold gained $12.70 to $1,349.40. Crude oil was $0.10 higher at $64.57 and Brent crude slipped $0.13 to $69.83. China's Dalian soybean futures were lower and Malaysian palm oil futures were higher overnight.

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BULL BEAR
1) Corn contracts look like they want to press the high side of their sideways trading ranges. 1) Old-crop corn's fundamentals remain bearish.
2) A weaker U.S. dollar could spark new export sales interest. 2) Old-crop and new-crop soybean contracts look to be rolling over into short-term downtrends after testing key technical resistance levels.
3) Weather remains a bullish factor for U.S. winter wheat crops 3) Fundamentals in general remain bearish for the wheat complex.

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 with both old-crop March and new-crop December creeping closer to the high end of their respective sideways trading ranges. For old-crop March that means another peak at $3.54 1/2, new-crop December $3.91. There isn't much fresh news out Wednesday morning, though Wednesday is often characterized by wider trading ranges on low volume. The old-crop market remains fundamentally bearish, though corn could find light support from the weaker U.S. dollar. All eyes will still be on this week's export sales and shipment update, pushed back until Friday (from Thursday) due to Monday's government shutdown.

SOYBEANS The overnight sell-off in soybeans looks to be technical in nature, with little fresh fundamental news for the market to chew on. Short-term uptrends in both old-crop March and new-crop November have gotten a little long in the tooth, looking to rollover as both test technical resistance price levels on daily charts. That mark is $9.85 3/4 for March, the 50% retracement level of its previous downtrend from $10.27 through the $9.44 1/2 low. November looks to be rolling over after testing $10.02 1/2 the last three days, the 61.8% retracement mark of its previous downtrend.

WHEAT Winter wheat contracts were trading higher early Wednesday, gaining back a percentage of what was lost during Tuesday's sell-off. There has been little change technically or fundamentally in winter wheat, particularly the new-crop July contracts. Both Kansas City and Chicago remain in uptrends on their weekly charts, with both needing a move beyond previous peaks, $4.70 3/4 and $4.62 respectively, to signal Wave 3 of a 5-wave move is under way. Fundamentally it's all about weather, in both the U.S. Southern Plains (and Midwest) and the Black Sea region (Russia, Ukraine) of Europe. The weaker U.S. dollar and U.S. dollar index could provide support, though to this point the greenback's major (long-term) downtrend has done little but stabilize the domestic wheat market. On the other hand basis continues to firm, particularly for U.S. HRW wheat.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.20 $0.00 -$0.31 Mar $0.008
Soybeans: $9.18 $0.04 -$0.68 Mar $0.017
SRW Wheat: $3.91 -$0.04 -$0.30 Mar $0.005
HRW Wheat: $3.80 -$0.04 -$0.43 Mar $0.008
HRS Wheat: $5.85 -$0.03 -$0.19 Mar -$0.003

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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