DTN Early Word Grains
Grains Quiet Again Overnight
March corn was 1 cent lower, March soybeans were 1 cent higher, and March Chicago wheat was fractionally lower.
CME Globex Recap:Grains continued in relatively quiet trade following Tuesday's bearish round of USDA supply and demand numbers. All three major markets moved within 2-cent trading ranges as traders kept an eye on developments in the U.S. dollar index. Tuesday saw new talk of possible negative interest rates by Fed Chairwoman Yellen prior to her Wednesday meeting with the House Financial Services Committee. Outside markets were mixed with crude oil higher and gold lower.
OUTSIDE MARKETS:The Dow Jones Industrial Average closed 12.67 points lower at 16,014.38, the NASDAQ Composite was down 14.99 points at 4,268.76, and the S&P 500 fell 1.23 points to close at 1,852.10 Tuesday. DJIA futures were 129 points higher overnight. Asian markets were mostly lower with the Nikkei down another 372.05 points (2.3%). European markets were higher with London's FTSE 100 up 74.79 points (1.3%). The U.S. dollar index was 0.184 higher at 96.255. Crude oil was up $0.46 at $28.40 while Brent crude rallied $0.47 to $30.79. April gold was $15.30 lower at $1,183.30. Malaysian palm oil futures were lower.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | March corn continues to hold above minor and secondary technical support. | 1) | Just about every number in USDA's February report was bearish for corn. |
| 2) | USDA left soybean exports unchanged at 1.69 bb in its February reports. | 2) | The February WASDE report saw an increased soybean crop production estimate for Argentina while Brazil's was left unchanged at 100 mmt. |
| 3) | The strengthening downtrend of the U.S. dollar index could spark renewed buying interest in wheat. | 3) | It's simple, larger domestic and global ending stocks of wheat are projected. |
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 March corn was lower again overnight on trade volume of only 6,500 contracts. March continues to test minor (short-term) technical price support between $3.61 and $3.56 3/4 as the downtrend on its daily chart looks to be nearing an end. Fundamentally the market was able to absorb USDA's bearish blow of increased ending stocks (due to larger imports and decreased exports) thanks to the continued meltdown of the U.S. dollar index. Despite USDA'S bearish projections, both domestically and globally, corn's forward curve (series of futures spreads) continues to reflect a neutral commercial outlook.
SOYBEANS March soybeans were fractionally higher early Wednesday, holding near minor (short-term) technical price support at $8.64. Daily stochastics (short-term) momentum study shows the contract to be in an oversold situation meaning buying enthusiasm could start to pick up. This seems counter-intuitive given USDA's bearish round of February supply and demand numbers that saw its domestic ending stocks projection grow by 10 mb and its world ending stocks figure increase by 1.14 mmt. Most notable in the world numbers was leaving Brazil's production at 100 mmt while increasing Argentina's crop size 1.5 mmt to 58.5 mmt. Traders should continue to monitor developments in the suddenly bearish U.S. dollar index while keeping an eye on South American weather forecasts.
WHEAT Winter wheat contracts were fractionally lower early Wednesday, pressured by the rally in the U.S. dollar index and USDA's bearish round of supply and demand numbers in its February reports. Regarding the latter, domestic ending stocks were increased 25 mb on a like reduction in exports while global ending stocks were projected to be 238.9 mmt as compared to January's estimate off 232.0 mmt. Again the increase was due to lower demand estimates leading to a solid gain in ending stocks to use to 33.6%. Technically the March Chicago contract posted a new low of $4.55 before rallying slightly Tuesday. The overnight session saw the March Chicago issue hold above this new low on light trade volume of 3,900 contracts.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.38 | -$0.01 | -$0.23 | Mar | $0.003 |
| Soybeans: | $8.15 | $0.01 | -$0.48 | Mar | $0.001 |
| SRW Wheat: | $4.16 | -$0.01 | -$0.41 | Mar | -$0.002 |
| HRW Wheat: | $3.89 | $0.00 | -$0.56 | Mar | $0.007 |
| HRS Wheat: | $4.64 | $0.02 | -$0.24 | Mar | $0.006 |
Darin Newsom can be reached at darin.newsom@dtn.com
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(CZ)
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