DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

May corn was fractionally higher, May soybeans were 7 cents higher, and July Kansas City (HRW) wheat was 4 cents lower.

CME Globex Recap:

Markets were similar to what they were 24 hours ago, with soybeans rallying again, corn near unchanged, and the wheat complex under pressure. Crude oil extended its gains and the U.S. dollar index was lower. As for some markets changing direction, we have gold up and DJIA futures down triple-digits (of course) to start Wednesday.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 428.90 points (1.8%) higher at 24,408.00, the NASDAQ Composite gained 143.96 points (2.1%) to 7,094.30, and the S&P 500 rallied 43.71 points (1.7%) to 2,656.87 Tuesday. DJIA futures were 100 points lower early Wednesday morning. Asian markets closed mixed with Japan's Nikkei 225 down 107.22 points (0.5%), Hong Kong's Hang Seng up 168.97 points (0.6%) and China's Shanghai Composite adding 17.76 points (0.6%). European markets were trading mostly lower with London's FTSE 100 down 2.01 points, Germany's DAX falling 33.15 points (0.3%), and France's CAC 40 losing 16.23 points (0.3%). The euro was 0.0020 higher at 1.2376 while the U.S. dollar index lost another 0.12 to 89.50. June 30-year T-Bonds were 2/32 higher at 146'00 while June gold gained $3.60 to $1,349.50. Crude oil was $0.29 higher at $65.80 as Brent crude gained $0.16 to $71.20. China's Dalian soybean and Malaysian palm oil futures were both lower again overnight.

	BULL		BEAR
1)	In its April WASDE report, USDA dropped its global ending stocks of corn projection by 1.4 mmt.	1)	The corn market looks to be losing some of its bullish momentum, short-term.
2)	Tuesday saw an announced sale of U.S. soybeans to Argentina for the 2017-2018 marketing year.	2)	A late start to spring planting could ultimately lead to increased soybean acres in the U.S.
3)	Weather remains the bullish factor for both U.S. winter wheat and spring wheat.	3)	USDA upped its projection on domestic all wheat ending stocks to 1.064 bb in its April Supply and Demand report.

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 Not much has changed in the corn market, literally, since Tuesday's discussion in this space. The DTN National Corn Index (NCI, national average cash price), calculated Tuesday at $3.55, continues to sit just below its 1-year high of $3.57 1/4. National average basis remains weaker than normal at 34 1/4 under the May futures contract, though it did firm by 1/4 cent Tuesday, the carry in the May-to-July futures spread (8 1/2 cents) continued to cover a bearish level of calculated full commercial carry, and the new-crop December futures contract continues to sit just below technical resistance at $4.17 1/2. Wednesday's session could see spillover support from soybeans offset in part from light spillover pressure from wheat.

SOYBEANS The soybean market continues to chug along, drawing in new buying interest nearly every day. This coming Friday's CFTC Commitments of Traders report will be interesting, with reported positions as of yesterday's (Tuesday's) close. The DTN National Soybean Index (NSI, national average cash price) was calculated at roughly $9.79, putting national average basis at 71 cents under the May futures contract. Technically, the NSI continues to test resistance on its daily chart between $9.76 and $9.85. For now buyers continue to be more interested in decreasing projections of Argentine production, keeping an eye out for more export sales announcements similar to Tuesday. Argentina's purchase of 120,000 mt of 2017-2018 U.S. soybeans was the first in 20-some years, reportedly, confirming just how tight the buyer's supply and demand situation might be.

WHEAT The wheat complex was lower again Wednesday morning, with some interesting short-term developments starting to take shape on new-crop crop July Kansas City wheat's daily chart (for a more detailed discussion, see DTN's Technically Speaking blog that will be updated later Wednesday morning). In summary, the contract looks to be nearing a rollover from minor uptrend to downtrend. The weather situation for new-crop wheat hasn't changed all that much, though there has been some talk of possible rains across parts of the U.S. Southern Plains. DTN's morning forecasts dismiss this chance, calling for dry, windy conditions to continue over much of the HRW wheat growing area. New-crop September Minneapolis spring wheat seems to be building in the idea that fewer acres will be planted this spring given continued snow cover over much of the U.S. Northern Plains.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.55	-$0.01	-$0.34	May	$0.003
Soybeans:	$9.80	$0.03	-$0.70	May	$0.003
SRW Wheat:	$4.60	$0.01	-$0.32	May	-$0.002
HRW Wheat:	$4.81	-$0.01	-$0.40	May	-$0.001
HRS Wheat:	$6.14	$0.00	-$0.12	May	$0.001

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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