DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was 5 cents lower, May soybeans were 13 cents lower, and July Kansas City (HRW) wheat was 4 cents lower.

CME Globex Recap:

Markets were lower, nearly across the board, as drums announcing a trade war were growing louder in both the United States and China. DJIA futures followed up the 724 point loss on the Big Board Thursday with a 200 point sell-off overnight. The U.S. dollar index was lower, while gold jumped $15 on global uncertainty. Energies were mixed and softs, including cotton, were lower. The grain and oilseed complex was lower, led by a 12-cent break in soybeans.

OUTSIDE MARKETS:

: The Dow Jones Industrial Average closed 724.42 points (2.9%) lower at 23,957.69, the NASDAQ Composite lost 178.61 points (2.4%) to 7,166.68, and the S&P 500 dropped 68.24 points (2.5%) to 2,643.69 Thursday. DJIA futures were 190 points lower early Friday morning. Asian markets closed lower with Japan's Nikkei 225 down 974.13 points (4.5%), Hong Kong's Hang Seng falling 761.76 points (2.5%), and China's Shanghai Composite losing 110.72 points (3.4%). European markets were trading lower with London's FTSE 100 down 70.29 points (1.0%), Germany's DAX losing 248.14 points (2.0%), and France's CAC 40 off 98.95 points (1.9%). The euro was 0.0027 higher at 1.2331 while the U.S. dollar index was 0.12 lower at 89.70. June 30-year T-Bonds were 4/32 higher at 144'28 while April gold gained another $14.80 to $1,342.20. Crude oil was $0.20 higher at $64.50 as Brent crude added $0.12 to $69.03. China's Dalian soybean futures were higher and Malaysian palm oil futures were lower again overnight.

	BULL		BEAR
1)	Corn weekly export sales and shipment data (for the week ending Thursday, March 15) is expected to be bullish.	1)	Corn contracts, both old-crop and new-crop, remain in minor (short-term) downtrends on daily charts.
2)	It's possible weekly export sales of soybeans, for the week ending Thursday, March 15, were bullish.	2)	A trade war with China is bearish soybeans, as well as a number of other markets, both commodity and financial.
3)	U.S. Southern Plains weather forecasts still look windy and dry heading into the weekend, possibly providing support to new-crop KC wheat.	3)	This week's export demand update for wheat is expected to be bearish.

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 The corn market was lower overnight with contracts sitting at or near session lows early Friday morning. Technically old-crop May fell below minor (short-term) support near $3.74 1/2 while new-crop December dropped below its short-term support at $3.95 1/2. Given the setup of daily charts for both, May could now fall to a test of support near $3.63 1/2 and December $3.87. Fundamentally there isn't much new to talk about as the market waits on next week's Quarterly Stocks and Prospective Plantings reports set for release on Thursday, March 29. Due to wintery weather in Washington D.C, the release of weekly export sales and shipments (for the week ending Thursday, March 15) was delayed until Friday morning. It wouldn't be surprising to see big numbers for corn, though these were already traded in the market, some more than two weeks ago.

SOYBEANS Two of the United States most vulnerable commodities, in the agricultural sector at least, to new Chinese tariffs are hogs and soybeans. The latter was hit by heavy selling overnight, driving the nearby May contract down about 13 cents. Meanwhile, the May-to-July futures spread has seen its carry strengthen to 11 cents, on track to post a new low weekly close. Soybeans face the possibility of large-scale noncommercial long-liquidation after this group spent the last two months building a substantial net-long futures position on the weather problem in Argentina. And while production has been hurt in that country, harvest is now under way, a factor that tend to bring an end to weather markets. Finally, weekly export sales and shipments, for the week ending Thursday, March 15, will be released Friday morning. These numbers are expected to show total marketing shipments continue to run well behind USDA's projected pace of export demand.

WHEAT Like the rest of the grain complex, winter wheat markets were lower to start the day Friday. Chicago was down on what looked to be combined selling from commercial and noncommercial traders. New-crop July contracts for both Chicago and Kansas City were seeing increased pressure despite the fact the weather situation has not improved for HRW wheat (KC) across the U.S. Midwest. July Kansas City remains in a minor (short-term) downtrend on its daily chart despite signals this week that it could be bottoming. If the contract breaks down again, next minor support is near $4.69 3/4.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.39	$0.01	-$0.37	May	$0.002
Soybeans:	$9.51	$0.00	-$0.78	May	$0.003
SRW Wheat:	$4.23	$0.03	-$0.33	May	$0.005
HRW Wheat:	$4.29	$0.06	-$0.42	May	$0.006
HRS Wheat:	$5.75	$0.04	-$0.18	May	$0.006

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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