DTN Early Word Grains
Back to Green
March corn was 1 cent higher, March soybeans were 4 cents higher, and July Kansas City (HRW) wheat was 3 cents higher.
CME Globex Recap:The grain and oilseed complex was higher early Friday while energies and metals traded lower. Meanwhile, the U.S. dollar firmed again overnight while DJIA futures added to Thursday's solid rally.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 164.70 points (0.7%) higher at 24,962.48, the NASDAQ Composite lost 8.14 points (0.1%) to 7,219.09, and the S&P 500 gained 2.63 points (0.1%) to 2,703.96 Thursday. DJIA futures were 76 points higher early Friday morning. Asian markets closed higher with Japan's Nikkei 225 up 156.34 points (0.7%), Hong Kong's Hang Seng adding 301.49 points (1.0%), and China's Shanghai Composite up 20.47 points (0.6%). European markets were trading mostly lower with London's FTSE 100 down 22.46 points (0.3%), Germany's DAX losing 12.55 points (0.1%), and France's CAC 40 off 12.33 points (0.2%). The euro was 0.0065 higher at 1.2297 while the U.S. dollar index added 0.23 to 89.95. March 30-year T-Bonds were 14/32 higher at 143'18 while April gold lost $1.90 to $1,330.80. Crude oil was $0.37 lower at $62.40 and Brent crude dropped $0.46 to $65.93. China's Dalian soybean and Malaysian palm oil futures were higher overnight.
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| BULL | BEAR | ||
| 1) | Spillover buying from soybean meal and soybeans could continue to support corn Friday. | 1) | The corn market in general remains overbought, possibly leading to a round of noncommercial selling to close out the week. |
| 2) | Weather forecasts for Argentina are dry for next week, providing renewed support for soybean meal and soybeans heading into the weekend. | 2) | Increased commercial selling could be seen Friday in soybeans. |
| 3) | A higher weekly close by July KC wheat would establish a bullish technical signal on the contract's weekly chart. | 3) | A lower weekly close by July KC wheat would establish a bearish technical signal on the contract's weekly chart. |
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MORE COMMODITY-SPECIFIC COMMENTSCORN Corn contracts were showing small gains early Friday morning, supported by spillover buying from soybeans. Technically, the market continues to show bearish short-term signals on daily charts, though has failed so far to generate much selling interest. Initial short-term support for old-crop May is at Wednesday's low of $3.72 1/4, with resistance at Tuesday's high of $3.78. New-crop December's short-term range heading into Friday's session is $3.99 to $3.94 1/2. Fundamentally the driver continues to be South American weather, starting with Argentina (soybean meal, soybeans) but also Brazil's second corn crop (safrinha). Friday morning will see the release of weekly export sales and shipment numbers for the week ending Thursday, February 15, delayed from Thursday due to Monday's U.S. holiday.
SOYBEANS Soybean contracts were showing solid 4-cent gains early Friday morning, supported by a renewed rally in soybean meal. The issue is what it has been for weeks now, ongoing dryness across much of Argentina's growing area. Technically, short-term indicators show soybeans to be overbought but as markets have shown so many times in the past, weather markets don't care about overbought momentum indicators (for an in-depth discussion of this winter's weather markets, see this week's Newsom on the Market column on DTN). It will be interesting to see if old-crop May can take out Tuesday's high of $10.50. Fundamentally, weekly export sales and shipment data (for the week ending Thursday, February 15) will be released Friday morning, delayed from Thursday due to Monday's U.S. holiday.
WHEAT Winter wheat contracts were able to shake off recent pressure tied to precipitation over the eastern Southern Plains this week, trading higher early Friday morning. All eyes will be on the new-crop July KC (HRW) wheat contract to see where it closes in relation to last Friday's settlement of $5.10 1/2. Given that the contract has already traded outside last week's range, a higher weekly settlement would be considered bullish and a lower weekly close bearish. Fundamentally there is little new to add to the equation, with old-crop export weekly sales and shipment numbers (for the week ending Thursday, February 15) not expected to cause much of a stir.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.37 | $0.01 | -$0.30 | Mar | $0.002 |
| Soybeans: | $9.63 | -$0.02 | -$0.69 | Mar | $0.006 |
| SRW Wheat: | $4.24 | $0.04 | -$0.28 | Mar | $0.002 |
| HRW Wheat: | $4.29 | $0.05 | -$0.41 | Mar | -$0.004 |
| HRS Wheat: | $5.88 | $0.03 | -$0.15 | Mar | $0.013 |
Darin Newsom can be reached at darin.newsom@dtn.com
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