DTN Early Word Grains
January Jobs and the Year of the Monkey
March corn was fractionally lower, March soybeans were 3 cents higher, and March Chicago wheat was fractionally lower.
CME Globex Recap:Though this morning's title sounds like a cheap Indiana Jones ripoff (much like Crystal Skull was), it's actually in reference to the two major market events traders will be tracking Friday. This week's collapse in the U.S. dollar index could focus even more attention on the January jobs data set for release, while China is set to begin its weeklong New Year's holiday next week. Both could play a major role in the direction of grains, with markets tentatively mixed overnight into early Friday morning. Energies and metals were mostly higher while DJIA futures continued to rally.
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The Dow Jones Industrial Average closed 79.92 points higher at 16,416.58, the NASDAQ Composite was up 5.32 points at 4,509.56, and the S&P 500 rallied 2.92 points to close at 1,915.45 Wednesday. DJIA futures were 35 points higher overnight. Asian markets were mixed with the Nikkei down another 225.40 points (1.3%) and China's Shanghai Composite fell 17.53 points (0.6%) on the last day before its weeklong holiday. European markets were higher with London's FTSE 100 up 36.33 points (0.6%). The U.S. dollar index was 0.646 lower at 96.642. Crude oil was up $0.19 at $32.47 while Brent crude was off $0.04 to $35.00. April gold was $5.70 higher at $1,147.00. Dalian soybean and Malaysian palm oil futures were both lower.
| BULL | BEAR | ||
| 1) | Despite its short-term downturn, March corn's weekly chart remains bullish. | 1) | March corn has moved into a minor (short-term) downtrend on its daily chart. |
| 2) | One of the few bullish nuggets for soybeans is the still weak carry in the March-to-May futures spreads reflects a bullish commercial outlook. | 2) | Favorable weekend weather for Brazil and the end of business in China for a week could be viewed as bearish for soybeans. |
| 3) | If the U.S. dollar index goes down again, maybe wheat contracts will rally to close out the week. | 3) | Regardless of moves in the U.S. dollar index, there is little interest in U.S. supplies on the global market. |
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 COMMENTSCORN Corn contracts were fractionally lower early Friday, following through on Thursday's sell-off. Trade volume for the March issue was light at only 4,200 contracts, while its minor (short-term) trend has turned down. Initial support is pegged near $3.65 1/4, a price that marks the 33% retracement level of the previous minor uptrend from $3.48 1/2 through Thursday's high of $3.73 1/2. The 50% retracement level is down at $3.61. Traders will take note of South American weather forecasts heading into another weekend, while tracking outside markets following the release of January jobs data. In regards to the latter, this week's sell-off in the U.S. dollar index (USDX) has not sparked a great deal of buying in the market, so sellers could be ready to move if the USDX rallies.
SOYBEANS The last two days have seen similar patterns, with soybeans rallying early only to falter late. All the while commercial pressure continues to grow with the carry in the March-to-May futures spread strengthening to 3 1/2 cents this week. This fundamental weakness is likely tied to the coming weeklong New Year's holiday in China and recent favorable weather for the Brazilian soybean crop. Overnight trade saw contracts trade higher, again, with most near session highs early Friday morning. March beans saw moderate trade volume of 11,900 contracts while its minor (short-term) trend remains sideways between support at $8.64 and resistance near $8.92.
WHEAT Wheat contracts were lower early Friday following a lightly traded overnight session. Volume for the Chicago March issue was only 5,000 contracts. Speaking of the March Chicago, it slipped below minor (short-term) support at $4.72 1/4 overnight looking like an extended slide to the next level of $4.66 3/4 is possible. This week's failure of the market to rally despite a sharp break in the U.S. dollar index (USDX) doesn't bode well for wheat, particularly if the USDX finds renewed buying interest following the release of January jobs data.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.45 | -$0.03 | -$0.23 | Mar | -$0.003 |
| Soybeans: | $8.27 | -$0.02 | -$0.47 | Mar | -$0.002 |
| SRW Wheat: | $4.31 | -$0.12 | -$0.41 | Mar | -$0.050 |
| HRW Wheat: | $4.05 | -$0.06 | -$0.55 | Mar | $0.029 |
| HRS Wheat: | $4.72 | -$0.02 | -$0.22 | Mar | $0.037 |
Darin Newsom can be reached at darin.newsom@dtn.com
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(CZ)
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