DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was fractionally lower, May soybeans were 6 cents lower, and July Kansas City (HRW) wheat was 2 cents lower.

CME Globex Recap:

Wednesday morning is starting much like Tuesday did, with the grain and oilseed complex quietly lower. Unlike Tuesday, however, most other commodity sectors were also lower overnight. The big mover overnight was DJIA futures, down more than 300 points reportedly on the news that Gary Cohn was leaving his role as White House economic advisor. This was interpreted by global markets as a signal President Trump was going ahead with his planned tariffs.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 9.36 points higher at 24,884.12, the NASDAQ Composite gained 41.30 points (0.6%) to 7,372.01, and the S&P 500 rallied 7.18 points (0.3%) to 2,728.12 Tuesday. DJIA futures were 314 points lower early Wednesday morning. Asian markets closed mostly lower with Japan's Nikkei 225 down 165.04 points (0.8%), Hong Kong's Hang Seng falling 313.81 points (1.0%), and China's Shanghai Composite losing 17.97 points (0.6%). European markets were trading mostly lower with London's FTSE 100 off 0.16 point, Germany's DAX down 39.40 points (0.3%), and France's CAC 40 falling 22.97 points (0.5%). The euro was 0.0029 higher at 1.2433 while the U.S. dollar index added 0.02 to 89.45. March 30-year T-Bonds were 10/32 higher at 144'23 while April gold slipped $1.30 to $1,333.90. Crude oil was $0.48 lower at $62.12 as Brent crude fell $0.54 to $65.25. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	Corn markets (old-crop futures, cash, new-crop futures) remain in seasonal uptrends.	1)	Corn seems to be losing some of its upside momentum this week.
2)	Soybean traders are anticipating some bullish numbers in Thursday's round of monthly supply and demand numbers from USDA.	2)	The soybean complex seems to be losing interest in the dry Argentina story, with renewed commercial selling seen in bean meal of late.
3)	New-crop winter wheat, particularly HRW, remains in a bullish weather situation.	3)	Old-crop wheat remains bearish, with traders still staring at a likely 1.0 bb-plus ending stocks figure for the 2017-2018 marketing year.

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 Similar to Tuesday, corn contracts were fractionally lower early Wednesday morning. Also similar to 24 hours ago, the news is unchanged in the corn market as traders continue to watch South American weather developments while waiting for USDA's March round of supply and demand numbers set for release 11 am (CT) Thursday (DTN's Report Preview "How Dry I Am" will be posted early Wednesday). The danger in having little fresh news to trade is the market working lower. However, corn continues to find enough commercial buying interest to move higher even if soybeans falter, as was the case Tuesday. Technically, corn remains in an overbought situation on its daily and weekly charts, though this hasn't broken uptrends yet. The market is generally looking for a neutral set of USDA numbers Thursday. Delivery of 67 contracts was reported against the March issue, putting the total at 880 contracts.

SOYBEANS Soybean contracts were showing losses early Wednesday morning, again threatening a potential short-term bearish breakdown on daily charts. The dry weather story out of Argentina seems to be growing long in the tooth, meaning the market may need a new bullish story to chew on for a while. Thursday will see the release of USDA's monthly U.S. supply and demand and WASDE reports, the latter expected to show a decrease in global production and ending stocks (DTN's report preview "How Dry I Am" will be posted early Wednesday morning). In other fundamental news, before Thursday's release of monthly estimates, weekly export sales and shipment data is expected to show U.S. demand continuing to run behind projections. But all of that is ahead on Thursday. As for Wednesday, the market could see wide price swings on low volume and little fresh news. There were no deliveries reported against the March soybean issue, leaving its total at 821 contracts. March soybean meal saw another 135 contracts delivered (total of 677 contracts) while March soybean oil came in at 35 contracts (total of 5,007 contracts).

WHEAT Winter wheat contracts were lower again early Wednesday, led by continued noncommercial selling in the Chicago (SRW) market. Winter wheat remains an interesting example of bearish old-crop fundamental factors squaring off against what is expected to be a less bearish (notice I didn't say "bullish") new-crop situation. The weather across the U.S. Southern Plains remains windy and dry (for further discussion, see Todd Hultman's weekly column "HRW Wheat's Unexpected Rally" on DTN), meaning 2018 production of HRW wheat is likely to be reduced later this summer. This week the market seems to be focusing on the here and now, with USDA's March round of supply and demand numbers set for release Thursday (11 am CT) expected to be bearish (DTN's report preview "How Dry I Am will be posted early Wednesday).

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.52	$0.01	-$0.36	May	$0.002
Soybeans:	$9.96	-$0.03	-$0.79	May	$0.002
SRW Wheat:	$4.71	-$0.02	-$0.36	May	$0.001
HRW Wheat:	$4.94	-$0.03	-$0.47	May	$0.006
HRS Wheat:	$6.08	$0.05	-$0.21	May	$0.002

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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