DTN Early Word Grains

A Quiet Monday Morning in Grains

6:00 a.m. CME Globex:

December corn was unchanged, November soybeans were 6 cents higher, and December Chicago wheat was 1 cent lower.

CME Globex Recap:

Grains were mostly higher early Monday, led by renewed commercial buying in soybeans. Corn and wheat were able to trim early losses, and eventually trade either side of unchanged overnight, due to selling in the U.S. dollar index. Metals and energies were both trading higher early Monday.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 33.74 points higher Friday at 17,084.49. The NASDAQ Composite was up 19.68 points at 4,830.47. DJIA futures were 1 point lower overnight. Asian markets were mostly higher with China's Shanghai Composite up 104.51 points (3.28%). European markets were mostly lower. The U.S. dollar index was down 0.116 at 94.697. Crude oil was $0.20 higher at $49.83 while Brent crude was $0.20 higher at $52.85. December gold was $8.60 higher at $1,164.50. Dalian soybean futures and Malaysian palm oil futures were both higher.

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BULL BEAR
1) Spillover buying from soybeans could support corn early Monday. 1) The short-term trend in corn remains down.
2) Overnight strength in China's stock markets could spark renewed commercial buying in soybeans. 2) Soybeans have been unable to break out of its sideways range with overhead resistance holding firm.
3) If the U.S. dollar index extends its downtrend, the U.S. wheat complex could see increased buying interest. 3) As with corn, the short-term trend of both December Chicago and July Kansas City wheat remains down.

See Grain Archives for more information on the fundamental situation in grains. See the DTN Ag Weather Brief for complete market weather comments.

MORE COMMODITY-SPECIFIC COMMENTS

CORN December corn tested minor (short-term) support on its daily chart at $3.80 1/2 overnight posting a session low of $3.80 1/4. The support price marks the 50% retracement level of the previous short-term uptrend from $3.61 1/4 through recent high of $3.99 3/4. Trade volume picked up with 17,300 contracts changing hands, leading to a slightly wider trading range of 5 cents for the session. Still, the contract was near unchanged. Fundamentally, weather remains a non-issue for most of the U.S. allowing harvest to continue to progress. This could lead to renewed commercial pressure as Monday progresses. Last Friday evening saw national average basis hold steady with the previous week, with the DTN National Corn Index (national average cash price) calculated at $3.49 putting it roughly 33 3/4 cents under the close of the December contract.

SOYBEANS Despite its overnight rally, supported by decent trade volume of about 25,600 contracts, the November soybean contract remains in a sideways trend. Resistance near $8.98 3/4 continues to hold, as does support at the 20-day moving average calculated Monday near $8.80 1/2. Commercial buying looked as if it woke up overnight with nearby contracts gaining on deferred issues. Some of this could be tied to the strong rally in China's stock markets, most notably the Shanghai Composite, as well as the sell-off in the U.S. dollar index. As has been the case for months, the market's forward curve for the 2015-2016 marketing year remains bullish. Friday evening saw the DTN National Soybean Index (national average cash price) calculated at $8.28 1/2, roughly 57 1/4 under the weekly close of the November futures contract. This was about 1/2 cent weaker than the previous week's basis calculation.

WHEAT Winter wheat contracts were fractionally mixed with Chicago lower and Kansas City higher. The minor (short-term) trend of December Chicago remains down with the contract sliding below initial support near $5.08 3/4. This price marks the 33% retracement level of the previous short-term uptrend from $4.63 through the high of $5.31 1/2. Bearish momentum indicators suggest Dec Chicago could pull back to the 50% retracement level of $4.97 1/4. A similar pattern is seen in the new-crop July Kansas City contract, with next support pegged at $5.27 3/4. Fundamentally traders will continue to watch the direction of the U.S. dollar index in the hopes that its downtrend could eventually spark increased export demand for U.S. supplies. National average basis for SRW weakened slightly last week with the DTN National SRW Index (national average cash price) calculated at $4.54 Friday evening, about 55 1/4 under the close of the December Chicago futures contract. As for new-crop, weather patterns over both the U.S. Southern Plains (HRW) and the Midwest (SRW) will continue to be monitored for planting progress.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.49 -$0.09 -$0.34 Dec -$0.002
Soybeans: $8.29 $0.04 -$0.57 Nov -$0.006
SRW Wheat: $4.54 -$0.03 -$0.55 Dec -$0.006
HRW Wheat: $4.44 -$0.03 -$0.56 Dec $0.000
HRS Wheat: $4.90 -$0.02 -$0.39 Dec -$0.007

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

(CZ)

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