DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was fractionally lower, May soybeans were 5 cents higher, and July Kansas City (HRW) wheat was fractionally lower.

CME Globex Recap:

The grain and oilseed complex was mixed early Wednesday with grains lower and oilseeds higher. Other commodity sectors were mostly higher with gains seen in metals, energies, and softs. In the latter, cotton was the exception. DJIA futures and the U.S. dollar index were both lower ahead of an expected announcement of an increased Fed Fund rate by the FOMC later in the day.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 116.36 points (0.5%) higher at 24,727.27, the NASDAQ Composite gained 20.06 points (0.3%) to 7,364.30, and the S&P 500 rallied 4.02 points (0.2%) to 2,716.94 Tuesday. DJIA futures were 38 points lower early Wednesday morning. Asian markets closed mostly lower with Japan's Nikkei 225 down 99.93 points (0.5%), Hong Kong's Hang Seng off 135.41 points (0.4%), and China's Shanghai Composite losing 9.69 points (0.3%). European markets were trading mostly lower with London's FTSE 100 down 37.91 points (0.5%), Germany's DAX losing 2.61 points, and France's CAC 40 off 15.61 points (0.3%). The euro was 0.0042 higher at 1.2283 while the U.S. dollar index slipped 0.27 to 90.14. June 30-year T-Bonds were 8/32 lower at 143'19 while April gold gained $4.60 to $1,316.50. Crude oil was $0.36 higher at $63.90 as Brent crude gained $0.43 to $67.85. China's Dalian soybean futures were mixed and Malaysian palm oil futures were higher overnight.

	BULL		BEAR
1)	Spillover buying could help corn contracts hold recent tests of short-term technical price support.	1)	Continued commercial selling could drive corn contracts down to a test of next technical price support.
2)	Soybean contracts are showing indications of being oversold short-term, meaning another round of light buying interest could be seen.	2)	Despite Tuesday's light round of commercial buying interest the carry in the May-to-July futures spread remains bearish.
3)	Similar to soybeans, July KC wheat finds itself technical oversold short-term.	3)	The path of least resistance, at least for now, in winter wheat markets remains down.

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 Both old-crop May and new-crop December corn contracts remain in minor (short-term) downtrends on their respective daily charts. However, both are also testing minor support at 50% retracement levels of previous uptrends. For May that price is $3.74 1/2 with the contract sitting at $3.74 1/4 early Wednesday morning. For the December minor support is pegged at $3.95 1/2, equal to Tuesday's low. If spillover support from soybeans is seen these support levels could hold. However, daily stochastics (short-term momentum study) for neither contract is showing an oversold situation meaning there is more room to the downside short-term. Next support for May is $3.69 1/2 and December $3.91 1/2.

SOYBEANS Soybeans continue to chew away at Monday's sharp sell-off, with contracts gaining about a nickel overnight through early Wednesday morning. Technically, both old-crop May and new-crop November contracts remain in minor (short-term) downtrends on their respective daily charts, with daily stochastics (short-term momentum study) for May nearing a possible bullish signal in oversold territory. Commercial buying provided support to the market Tuesday, though the carry in the May-to-July futures spread remains bearish as it covers more than 70% of calculated full commercial carry. A second consecutive higher daily close is possible, particularly if light commercial buying continues to be seen.

WHEAT Winter wheat has fallen hard this week, after the new-crop July Kansas City contract left a bearish price gap on its daily chart this past Monday. Since then the contract has fallen to test support near $4.88, posting a low of $4.84 1/2 Tuesday before bouncing back to close at $4.87 3/4. If this support doesn't hold, the next target is near $4.70. However, daily stochastics (short-term momentum study) show the contract to be oversold meaning selling interest could start to wane. Fundamentally there is little fresh news with this week's precipitation event across parts of the U.S. Southern Plains providing some, but not much, relief to the crop.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.37	-$0.01	-$0.37	May	-$0.006
Soybeans:	$9.50	$0.06	-$0.78	May	-$0.001
SRW Wheat:	$4.21	$0.02	-$0.32	May	$0.000
HRW Wheat:	$4.28	$0.00	-$0.42	May	$0.000
HRS Wheat:	$5.75	-$0.03	-$0.19	May	$0.005

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.