DTN Early Word Grains
Trump Trumps Mnuchin, Trumped by Market
March corn was 1 cent higher, March soybeans were fractionally higher, and March Chicago (SRW) wheat was 2 cents higher.
CME Globex Recap:The back and forth within the Trump administration itself regarding the U.S. dollar is like watching irritating arguments on reality television. A day after Treasury Secretary Mnuchin said the administration wasn't concerned about a weaker dollar, that it was good for exports and the economy, President Trump countered with talk that the U.S. wanted a strong dollar. Overnight trade would show market forces lining up with Secretary Mnuchin as the greenback got pummeled once again. However, unlike earlier in the week commodities didn't react by rallying, with gold trading lower early Friday. The grain and oilseed complex was quietly mixed with wheat still stronger on weather.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 140.67 points (0.5%) higher at 26,392.79, the NASDAQ Composite dipped 3.89 points to 7,411.16, and the S&P 500 added 1.71 points to 2,839.25 Thursday. DJIA futures were 55 points higher early Friday morning. Asian markets closed mixed with Japan's Nikkei 225 down 37.61 points (0.2%), Hong Kong's Hang Seng up 499.67 points (1.5%), and China's Shanghai Composite rallying 9.82 points (0.3%). European markets were trading higher with London's FTSE 100 up 39.86 points (0.5%), Germany's DAX gaining 5.89 points, and France's CAC 40 adding 48.59 points (0.9%). The euro was 0.0061 higher at 1.2457 as the U.S. dollar index fell another 0.58 to 88.87. March 30-year T-Bonds were 8/32 lower at 149'05 while February gold lost $9.40 to $1,353.50. Crude oil was $0.16 higher at $65.67 and Brent crude added $0.14 to $70.56. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Corn continues to show bullish short-term momentum. | 1) | Corn contracts are nearing the high-side of sideways trading ranges and may not have the fundamentals to push much higher. |
| 2) | Renewed selling of the U.S. dollar could support soybeans. | 2) | Old-crop and new-crop soybeans established bearish signals Thursday indicating short-term trends have turned down. |
| 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 COMMENTSCORN The corn market was quietly higher early Friday, quiet in the sense that trade volume (futures only) for old-crop March came in at 5,400 contracts. Still, March looks as if it wants to try to test resistance near its next round number of $3.60, as its daily stochastics (short-term momentum study) creep closer to the overbought level of 80%. Fundamentally there isn't much new to discuss as the market will continue to monitor South American weather heading into the weekend. Weekly export sales and shipment numbers, for the week ending Thursday, January 18, will be released Friday morning. While sales are expected to remain strong, marketing year shipments should still be lagging both the 3-year and 4-year averages. This won't be a shock to the market given the strength of the carry in the March-to-May and May-to-July futures spreads.
SOYBEANS The debate over what happened to soybeans Thursday afternoon continued well into the night. The counterpoint to bearish influence from a block trade in options (see DTN's Closing Comments) was that a midday change in Argentine weather forecasts coupled with President Trump's statement regarding a stronger dollar, contradicting his Treasury Secretary, sparked the sell-off in soybeans. It's also possible that it wasn't an either/or situation, where all three factors likely came into play. The technical picture is clearer as both old-crop March and new-crop November established technical signals showing short-term uptrends on daily charts rolled over into downtrends. Fundamentally the situation is similar to corn, with the soybean market keeping an eye on weekend weather forecasts for South America heading into the weekend. Also, weekly export sales (for the week ending Thursday, January 18) are expected to be solid while shipments continue to lag the 4-year average.
WHEAT The wheat complex was higher again early Friday, supported by another strong sell-off in the U.S. dollar index. New-crop July Kansas City is quietly creeping up on resistance at its previous high of $4.71 1/4, with a move above that mark an important step in signaling Wave 3 (of a 5-wave uptrend) is under way. Fundamentally it's all about weather, both at home (particularly the U.S. Southern Plains) and abroad. The latter was highlighted early Friday morning by a story out of Russia stating the winter there was so mild Russian bears were having difficulty hibernating. Image what that is doing for the winter wheat crop. Weekly export sales and shipments (for the week ending Thursday, January 18) are expected to be a non-event for wheat in general.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.24 | -$0.01 | -$0.31 | Mar | $0.000 |
| Soybeans: | $9.24 | $0.00 | -$0.68 | Mar | -$0.001 |
| SRW Wheat: | $4.04 | $0.01 | -$0.30 | Mar | -$0.003 |
| HRW Wheat: | $3.93 | $0.02 | -$0.42 | Mar | -$0.002 |
| HRS Wheat: | $5.93 | $0.02 | -$0.17 | Mar | -$0.004 |
Darin Newsom can be reached at darin.newsom@dtn.com
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