DTN Early Word Grains

Grains Take a Breather Overnight

Darin Newsom
By  Darin Newsom , DTN Senior Analyst
Connect with Darin:
6:00 a.m. CME Globex:

March corn was 1 cent lower, March soybeans were 2 cents lower, and July Kansas City (HRW) wheat was 3 cents lower.

CME Globex Recap:

Grain and oilseed markets were showing small losses early Tuesday morning, mostly, though only to gear up for the next rally. The U.S. dollar was weaker, with the Index being pummeled versus other currencies due to stronger global stock markets. However, DJIA futures were showing another triple-digit loss overnight hinting at continued high volatility. Metals and energies were mostly higher while softs were mostly lower.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 410.37 points (1.7%) higher at 24,601.27, the NASDAQ Composite gained 107.47 points (1.6%) to 6,981.96, and the S&P 500 rallied 36.45 points (1.4%) to 2,656.00 Monday. DJIA futures were 170 points lower early Tuesday morning, hinting at another volatile session. Asian markets closed mostly higher with Japan's Nikkei 225 down 137.94 points (0.7%), Hong Kong's Hang Seng up 379.90 points (1.3%), and China's Shanghai Composite up 30.83 points (1.0%). European markets were trading mostly lower with London's FTSE 100 up 12.02 points (0.2%), Germany's DAX down 29.99 points (0.2%), and France's CAC 40 off 9.20 points (0.2%). The euro was 0.0051 higher at 1.2344 while the U.S. dollar index fell 0.39 to 89.71. March 30-year T-Bonds were 14/32 higher at 144'27 while April gold gained $5.30 to $1,331.70. Crude oil was $0.03 lower at $59.26 and Brent crude added $0.16 to $62.75. China's Dalian soybean futures were slightly higher and Malaysian palm oil futures were lower overnight.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

BULL BEAR
1) Corn could continue to find support from soybeans, which is being supported by soybean meal, meaning corn is really being supported by meal. 1) Technically, both old-crop and new-crop corn futures look to still be in minor (short-term) downtrends.
2) Argentina's weather should keep buyers interested in soybean meal, with spillover attention going to soybeans. 2) Similar to corn, old-crop and new-crop soybean futures did not break out of their respective short-term downtrends with Monday's strong rally.
3) Little weather relief is in sight for the U.S. Southern Plains HRW growing area. 3) New-crop July Kansas City wheat posted a double-top on its daily chart overnight.

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 posted a quiet session overnight with old-crop March showing a 3/4 cent trading range on volume (futures only) of only 8,600 contracts. New-crop December was similar with a range of 3/4 cent and volume of 2,700 contracts. Technically, March is still showing signs of a minor (short-term) downtrend after failing to take out the previous high of $3.67 3/4 on its daily chart during Monday's rally. Keep an eye on futures spreads this week to see if increased commercial selling emerges, enough to slow the recent round of noncommercial buying. New-crop December was able to equal its previous high $3.96 3/4 during Monday's trade, putting itself in position to establish a short-term double-top on its daily chart.

SOYBEANS The soybean complex was showing a small loss early Tuesday morning, though will continue to keep a close eye on soybean meal. There the nearby March contract was able to climb back above unchanged, slightly, due to continued concerns over Argentina's crop. As for soybeans, old-crop March came up a half-cent short of the previous high of $10.04 3/4 on its daily chart during Monday's rally. This opens the door to a possible technical sell-off, if not for the spillover commercial buying from soybean meal. The old-crop forward curve did show a stronger carry early Tuesday, hinting at increased commercial selling in soybeans, though it remains to be seen whether or not this can continue once volume starts to pick up. New-crop November also failed to take out its previous daily high of $10.17 Monday, with light commercial selling also indicated by a slightly stronger carry in the November-to-March futures spread. For now, the key remains South American weather.

WHEAT New-crop July Kansas City wheat posted a high of $5.15 overnight before falling, establishing a double-top pattern on its short-term daily chart and indicating its minor trend is turning down. If so key support is at $4.86, the low from February 5 and the top side of a remaining price gap on its daily chart with the low end at $4.84 1/2 from January 29. Weather across the U.S. Southern Plains remains the issue with no break in the drought expected. It will be interesting to see how commercial traders approach the recent rally with light commercial selling seen during Monday's session.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.36 $0.05 -$0.31 Mar -$0.001
Soybeans: $9.33 $0.18 -$0.69 Mar -$0.005
SRW Wheat: $4.35 $0.16 -$0.29 Mar $0.009
HRW Wheat: $4.36 $0.12 -$0.42 Mar $0.003
HRS Wheat: $5.94 $0.08 -$0.16 Mar $0.015

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

(KR)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Darin Newsom

Darin Newsom
Connect with Darin: