DTN Early Word Grains
Stock Markets, Commodities Regaining Lost Ground
March corn is up 1 3/4 cents, March soybeans are up 4 3/4 cents, and March K.C. wheat is up 4 1/4 cents.
CME Globex Recap:The world's stock markets are higher early Friday, including the Dow Jones futures as investor concerns about the world economy show signs of easing. Crude oil and copper were also higher overnight, along with most grain prices.
OUTSIDE MARKETS:Previous closes on Thursday showed the Dow Jones Industrial Average up 162.94 at 24,370.10 and the S&P 500 up 19.86 at 2,635.96 while the 10-yr Treasury yield ended at 2.75%. Early Friday, DJIA futures are up 99 points. Asian markets are higher with Japan's Nikkei 225 up 263.80 (1.3%) and China's Shanghai Composite up 36.37 points (1.4%). European markets are higher with London's FTSE 100 up 67.72 points (1.0%), Germany's DAX up 109.59 points (1.0%), and France's CAC 40 up 52.84 points (1.1%). The March euro was up 0.001 at 1.146 and the March U.S. dollar index was down 0.02 at 95.69. March 30-year T-Bonds were down 8/32nds while February gold was down $7.30 at $1285.00 and February crude oil was up $0.78 at $52.85. Soybeans and meal on China's Dalian Exchange both showed small gains.
| BULL | BEAR | ||
| 1) | The seven-day forecast is still hot and mostly dry for south-central Brazil and flooding has been a problem in northern Argentina -- still stressful to crop conditions. | 1) | After six years of big harvests, grain supplies are plentiful. |
| 2) | Thursday's rally was based on a rumor that the U.S. may move away from tariffs, talk that is possible, but far from certain. | 2) | Given slow export activity, U.S. ending soybean stocks in 2018-19 have a chance to exceed one billion bushels. |
| 3) | Technically speaking, cash corn and wheat prices are holding above support. | 3) | The March 1 trade deadline is getting closer and there has been no breakthrough reported yet. |
CORN March corn is up 1 3/4 cents early Friday, threatening a higher close for the week after surviving Tuesday's big sell-off. We won't have CFTC data again unless the government reopens one of these days, but in retrospect, Tuesday's high volume sell-off now looks like a quick shakeout of impatient speculators as there has been no significant change in corn's fundamentals. We also can't confirm export activity without USDA's cooperation, but export sales have likely been supportive for corn prices the past 28 days, while concerns of hot and mostly dry weather in south-central Brazil may become a factor for Brazil's second corn crop. For now, the trend in cash corn prices remains up.
SOYBEANS March soybeans are up 4 3/4 cents early Friday, adding to Thursday's 13 1/4 cent gain, which turned out be related to a rumor. Several news sources reported the White House may be considering a plan to drop the tariffs against China in an effort to advance trade talks. If true, there is a chance China would then drop its 25% tariff on U.S. soybeans, but this scenario still has a lot of ifs and maybes so we will have to monitor. If nothing else, the rumor unexpectedly put bearish speculators in soybeans on their heels and is keeping March soybean prices above their 100-day average. Soybean prices are also being helped by persistent forecasts of hot and mostly dry weather in south-central Brazil. So far, cash soybeans are holding sideways, below their July high.
WHEAT March K.C. wheat is up 4 1/4 cents early, along with gains in the Chicago and Minneapolis contracts. Not only are outside markets friendly for grain prices early Friday, but wheat may also be benefiting from unconfirmed talk of U.S. sales to Egypt. Unfortunately, without the protection of export sales reports from USDA, there is no good way to confirm the rumors, but we can look and see that March K.C. futures have been holding sideways since their November low, showing decent support in spite of the market's bearish mood and lack of bullish argument. Similarly, cash HRW wheat prices are holding firm and are close to resuming their uptrend -- a possible sign of better than expected demand late in 2018-19.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.48 | $0.06 | -$0.32 | Mar | $0.002 |
| Soybeans: | $8.16 | $0.13 | -$0.92 | Mar | -$0.005 |
| SRW Wheat: | $4.93 | $0.05 | -$0.25 | Mar | -$0.001 |
| HRW Wheat: | $4.80 | $0.09 | -$0.24 | Mar | $0.002 |
| HRS Wheat: | $5.34 | $0.07 | -$0.38 | Mar | -$0.004 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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