DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

March corn was 1 cent lower, March soybeans were 7 cents lower, and July Kansas City (HRW) wheat was 5 cents lower.

CME Globex Recap:

Many of you might've gotten up a little earlier to see the lunar trifecta (blue moon, super moon, blood red moon), but if you missed it you can still see the blood red part by looking at Wednesday morning's markets. Commodities in general are lower, though it needs to be remembered the grain and oilseed complex is coming off a solid rally Tuesday. The U.S. dollar remains under pressure, though DJIA futures have stabilized following Tuesday's medically induced breakdown.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 362.59 points (1.4%) lower at 26,076.89, the NASDAQ Composite lost 64.02 points (0.9%) to 7,402.46, and the S&P 500 fell 31.10 points (1.1%) to 2,822.43 Tuesday. DJIA futures were 100 points higher early Wednesday morning. Asian markets closed mixed with Japan's Nikkei 225 down 193.68 points (0.8%), Hong Kong's Hang Seng rallying 279.98 points (0.9%), and China's Shanghai Composite off 7.18 points (0.2%). European markets were trading mixed with London's FTSE 100 down 7.33 points (0.1%), Germany's DAX up 26.42 points (0.2%), and France's CAC 40 up 13.50 points (0.3%). The euro was 0.0048 higher at 1.2451 as the U.S. dollar index dropped another 0.28 to 88.90. March 30-year T-Bonds were 10/32 higher at 147'22 while February gold added $6.90 to $1,342.30. Crude oil was $0.32 lower at $64.18 and Brent crude lost $0.48 to $68.54. China's Dalian soybean futures were mixed for a third consecutive session while Malaysian palm oil futures were lower again overnight.

	BULL		BEAR
1)	Solid noncommercial buying was seen in corn Tuesday.	1)	Corn contracts are in position to roll over into short-term downtrends.
2)	Soybeans also benefitted from solid noncommercial short-covering during the recent rally.	2)	It's not technically bullish for soybean contracts to see decreasing open interest during a rally.
3)	The weather forecast for the U.S. Southern Plains remains bullish for HRW wheat.	3)	Wheat continues to see a lack of short-term commercial bullishness.

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 The corn market is giving us a couple different looks Wednesday morning with short-term daily charts indicating both old-crop and March and new-crop December are set to roll over into minor downtrends while secondary (intermediate-term) trends for both remain up on weekly charts. Tuesday's rally was due, in large part, to noncommercial short-covering ahead of the cutoff for this Friday's CFTC Commitment of Traders report. It's not unusual to see increased trade volume on a Tuesday, particularly if this group has a large position one way or the other (in this case, net-short). While old-crop futures spreads continue to cover a bearish percent of calculated full commercial carry, keep an eye on the strengthening uptrend (weakening carry) in the new-crop December-to-March spread. This could continue to provide seasonal support to the new-crop market.

SOYBEANS Soybeans posted an impressive rally Tuesday with much of the support tied to noncommercial short-covering. While daily trade volume increased in the March contract, open interest decreased. As discussed in the analysis for corn, this isn't unusual on a Tuesday, particularly when noncommercial traders hold a large net-futures position, given it's the cutoff day for this coming Friday's CFTC Commitment of Traders report. Technically both old-crop March and new-crop November still look to be in position to roll over into minor (short-term) downtrends on their respective daily charts, though weather forecasts for Argentina remain largely unchanged. This should continue to provide support to old-crop soybeans, though commercial traders remain on the sidelines. Yes, the old-crop March-to-May spread has stabilized, meaning its previous downtrend (strengthening carry) is on hold for now at a bearish level of calculated full commercial carry. Initial short-term technical support for the March contract is at its 4-day low of $9.83 3/4, with the same support for new-crop November at $10.01.

WHEAT The wheat complex was lower early Wednesday morning, giving back some of Tuesday's impressive rally. Despite taking a breather overnight both new-crop July Kansas City and July Chicago remain in solid uptrends on weekly charts. The only change in the weather for the U.S. Southern Plains is cooler temperatures, but it is expected to be a dry cool with still no precipitation in sight for much of the growing area. This should help limit the selling, and possibly spark a stronger "buy the dips" mentality. New-crop September Minneapolis wheat is also hinting at a new uptrend on its weekly chart after moving to a new 4-week high this week.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.30	$0.03	-$0.32	Mar	$0.000
Soybeans:	$9.32	$0.09	-$0.69	Mar	-$0.002
SRW Wheat:	$4.27	$0.08	-$0.30	Mar	$0.005
HRW Wheat:	$4.29	$0.16	-$0.41	Mar	-$0.006
HRS Wheat:	$5.98	$0.03	-$0.18	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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