DTN Early Word Grains

Grains Mixed Early on "Middle-Child" Report Day

6:00 a.m. CME Globex:

March corn was 1 cent lower, March soybeans were 1 cent higher, and March Chicago wheat was 1 cent higher.

CME Globex Recap:

Forgotten in between USDA's boisterous January reports and the flamboyant March 31 Prospective Plantings and Quarterly Stocks are the February (and March) round of supply and demand numbers. Grains didn't show much care about the coming reports overnight, with soybeans and wheat gaining back part of Monday's sell-off while corn continued in its downtrend. Outside markets were mostly lower with gold, DJIA futures, and the U.S. dollar index down while crude oil was higher.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 177.92 points lower at 16,027.05, the NASDAQ Composite was down 79.39 points at 4,283.75, and the S&P 500 fell 26.61 points to close at 1,853.55 Monday. DJIA futures were 8 points lower overnight. Asian markets were mostly lower with the Nikkei down another 918.86 points (5.4%). European markets were also mostly lower though London's FTSE 100 was up 13.45 points (0.2%). The U.S. dollar index was 0.038 lower at 96.532. Crude oil was up $0.81 at $30.50 while Brent crude rallied $0.54 to $33.42. April gold was $8.80 lower at $1,189.10.

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BULL BEAR
1) March corn is drawing near minor and secondary technical support heading into Tuesday's USDA reports. 1) Domestic ending stocks of corn are expected to increase due to decreased export demand.
2) The average pre-report estimate showed global ending stocks of soybeans decreasing slightly due to an equally small reduction in Brazil's crop. 2) If USDA leaves Brazil's crop at 100 mmt, global ending stocks aren't likely to decrease.
3) March Chicago wheat is in a short-term technically oversold situation. 3) Domestic ending stocks of wheat are expected to increase in USDA February reports.

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 March corn continued in its downtrend overnight, posting a low of $3.60 1/2 on trade volume of only 7,200 contracts. Minor (short-term) technical support on its daily chart is at $3.61, then $3.56 3/4. Tuesday's round of USDA supply and demand numbers is expected to be bearish with U.S. ending stocks increasing on a possible reduction in export demand. According to last Thursday's weekly Sales and Shipment report (for the week ending January 28) shipments were running 22% behind the previous marketing year as compared to USDA's January estimate of a 9% year-to-year decrease. Support for March corn on its weekly chart is at the contract low of $3.48 1/2, while major (long-term) is near $3.50 1/4.

SOYBEANS March soybeans were showing a small gain early Tuesday, though continued to hold below minor (short-term) technical support on its daily chart at $8.64. Trade volume for the overnight session was light at only 5,200 contracts. On a slightly more bullish note, daily stochastics (short-term) momentum study) are nearing oversold heading into Tuesday's round of USDA supply and demand numbers. These numbers are expected to be bearish for soybeans with U.S. ending stocks projected to increase slightly on another cut in export demand. Also, the February WASDE report could leave Brazil's production number at 100 mmt and world ending stocks near unchanged from January. Secondary (intermediate-term) support on the March soybean weekly chart is $8.52, then its contract low of $8.47. Major (long-term) support on the market's monthly chart is at the November 2015 low of $8.44 1/4.

WHEAT March Chicago wheat was able to post fractional gains early Tuesday morning after Monday's test of the contract low at $4.56. Overnight trade volume was light at 3,400 contracts while daily stochastics (short-term momentum study) show March Chicago is in an oversold situation. However, neither this nor Monday's sharp sell-off in the U.S. dollar index has been able to generate any buying interest in the wheat complex in general (Kansas City was fractionally lower overnight). Tuesday's round of USDA supply and demand numbers are expected to be bearish, with U.S. ending stocks increasing slightly from January's estimate. Global ending stocks could see a slight decrease, though not enough to spark a great wave bullish enthusiasm.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.39 -$0.03 -$0.23 Mar $0.002
Soybeans: $8.15 -$0.05 -$0.48 Mar $0.000
SRW Wheat: $4.17 -$0.08 -$0.41 Mar $0.005
HRW Wheat: $3.89 -$0.08 -$0.57 Mar $0.004
HRS Wheat: $4.62 -$0.04 -$0.24 Mar $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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