DTN Early Word Grains
Grains Mixed Early Thursday
March corn was unchanged, March soybeans were 3 cents higher, and July Kansas City (HRW) wheat was 2 cents lower.
CME Globex Recap:Soybeans were able to rally again overnight while corn and wheat sagged slightly. The latter (wheat) wasn't too surprising given its strong double-digit gain in Chicago and Kansas City Wednesday. The U.S. dollar was stronger again overnight, putting pressure on both metals and energies. DJIA futures were also down again.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 19.42 points lower at 24,893.35, the NASDAQ Composite lost 63.90 points (0.9%) to 7,051.98, and the S&P 500 dropped 13.48 points (0.5%) to 2,681.66 Wednesday. DJIA futures were 61 points lower early Thursday morning. Asian markets closed mostly higher with Japan's Nikkei 225 up 245.49 points (1.1%), Hong Kong's Hang Seng gained 128.07 points (0.4%), and China's Shanghai Composite off 47.21 points (1.4%). European markets were trading lower with London's FTSE 100 down 59.63 points (0.8%), Germany's DAX off 134.29 points (1.1%), and France's CAC 40 losing 43.36 points (0.8%). The euro was 0.0026 lower at 1.2238 as the U.S. dollar index gained 0.13 to 90.47. March 30-year T-Bonds were 8/32 lower at 144'12 while April gold dipped $1.70 to $1,312.90. Crude oil was $0.35 lower at $61.44 and Brent crude slipped $0.36 to $65.15. China's Dalian soybean and Malaysian palm oil futures were both higher again overnight.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | USDA is expected to decrease U.S. and world ending stocks in its February report. | 1) | The corn market is overbought short-term, leaving it vulnerable to a round of selling. |
| 2) | Soybean contracts were able to erase Wednesday's loss overnight into Thursday morning. | 2) | USDA is expected to increase domestic ending stocks of soybeans put once again trimming its export demand projection. |
| 3) | The February WASDE report is expected to show a slightly lower global wheat ending stocks number. | 3) | Winter wheat contracts could look at giving back some of Wednesday's double-digit rally. |
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 Not much changed in corn overnight with old-crop March and new-crop December both posting 1 cent trading ranges through early Thursday morning. Technically, corn remains overbought on its short-term daily chart while comfortably in a seasonal uptrend on its intermediate-term weekly chart. All while still showing a long-term downtrend on monthly charts. Fundamentally the market continues to firm with the carry in the March-to-May futures spread weakening and national average basis showing some strength. Thursday will see the release of weekly export sales and shipment numbers, for the week ending Thursday, February 1. Traders will keep an eye on whether or not the pace of corn shipments continues to gain against its average and USDA's "current" projection. Speaking of which, later in the morning (11 am CT) USDA will release its latest supply and demand numbers, including a possible change in export demand. Changes could also be seen in South American corn production and export numbers, all meaning the market is likely to be more active the last couple hours of Thursday's session.
SOYBEANS Soybeans rallied overnight, erasing Wednesday's loss for the most part. Technically both old-crop March and new-crop November remain in short-term downtrends on their daily charts, and with a strong carry still seen in the March-to-May futures spread traders could be positioning for a bearish response to Thursday's USDA Supply and Demand numbers. Pre-report estimates show an expected increase of about 20 mb in U.S. ending stocks, following January's jump of 65 mb. If so, it is likely to be due to a decrease in expected U.S. exports, with Brazilian shipments expected to increase. Speaking of South America, it is also expected that potential decreases in Argentina's production could be offset by gains in Brazil's production, with Chinese demand staying about the same. If all this is realized it could lead to that bearish response in the U.S. market mentioned above.
WHEAT The wheat complex was mixed early Thursday with winter markets lower and spring wheat showing a quiet gain. As for new-crop winter contracts, both July Kansas City and Chicago were under pressure following Wednesday's sharp rally. But remain in solid uptrends on weekly charts, with Kansas City above its resistance mark of $5.10 while Chicago eyes its next resistance of $4.94. Seasonally July KC tends to post a high weekly close this week, though this could be a year when a later seasonal peak occurs. Buyers could remain interested in new-crop HRW through most of March, until it comes out of dormancy, and more is known about it's the actual condition of the crop. As for Thursday's reports, not much is expected to change for wheat. Traders could keep an eye on world production numbers, with a slight decrease expected in global ending stocks.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.35 | $0.02 | -$0.30 | Mar | $0.003 |
| Soybeans: | $9.15 | -$0.03 | -$0.68 | Mar | $0.006 |
| SRW Wheat: | $4.31 | $0.14 | -$0.30 | Mar | -$0.002 |
| HRW Wheat: | $4.39 | $0.11 | -$0.42 | Mar | -$0.005 |
| HRS Wheat: | $5.97 | $0.04 | -$0.15 | 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
(KR)
Copyright 2018 DTN/The Progressive Farmer. All rights reserved.