DTN Early Word Grains

Tuesday is the New Monday

6:00 a.m. CME Globex:

December corn was fractionally lower, November soybeans were 4 cents higher, and December Chicago wheat was unchanged.

CME Globex Recap:

The overnight trade in grains was similar to what was seen Sunday into Monday, though volume was considerably lighter in corn and wheat. Corn was still holding near unchanged early Tuesday, while wheat was about 1 cent higher. The soybean complex showed the most strength with all three markets trading higher.

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OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 47.37 points higher Monday at 17,131.86. The NASDAQ Composite was up 8.17 points at 4,838.64. DJIA futures were 81 point lower overnight. Asian markets were mostly lower with the Nikkei down 203.93 points at 18,234.74 while China's Shanghai Composite was up 5.57 points. European markets were also mostly lower. The U.S. dollar index was down 0.051 at 94.790. Crude oil was $0.20 lower at $46.90 while Brent crude was $0.13 lower at $49.73. December gold was $10.00 lower at $1,154.50. Dalian soybean futures and Malaysian palm oil futures were both higher.

BULL BEAR
1) Typical Turnaround Tuesday activity could lead to a small rally in corn. 1) The short-term trend in corn remains down.
2) November soybeans seem to be building bullish momentum. 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 The minor (short-term) trend of December corn remains down as the contract continues to test support at $3.80 1/2. This price marks the 50% retracement level of the previous short-term uptrend from $3.61 1/4 through the high of $3.99 3/4. Daily momentum studies show the contract is still bearish, but drawing closer to an oversold situation. Trade volume was light overnight with only 5,600 contracts (Dec corn) changing hands through early Tuesday morning. Look for the market to continue to grind lower, with little support expected from weekly export inspections (morning) or weekly crop progress (afternoon) numbers, both delayed from Monday due to the Columbus Day holiday.

SOYBEANS Tuesday's soybean comments aren't that much different from Monday's, or last week's for that matter. The market is still stuck in neutral with the November contract holding below technical resistance at $8.98 3/4 while holding above support at its 20-day moving average of $8.80 1/2. While overnight trade volume was solid again, coming in at about 21,500 contracts through early Tuesday morning, commercial buying interest remains fleeting. At one point last week the November to January futures spread looked to be headed to par (even), if not into a slight inverse. Now that same spread is showing a 5-cent carry. It would not be surprising to see Tuesday's session follow the same script as Monday's, with an early rally failing and contracts struggling to hold gains at the close.

WHEAT The short-term trend for all three wheat markets (December Chicago, July Kansas City, and December Minneapolis) remains down. December Chicago (used as a proxy for the complex as a whole) is testing technical support near $5.05 1/4 (the overnight low was $5.05), a price that marks the 38.2% (Fibonacci) of the previous uptrend from $4.63 through the high of $5.31 1/2. However, given daily momentum studies are still bearish and recent selling from commercial traders, it would not be surprising to see the contract pull back to its 50% retracement level of $4.97 1/4. Overnight trade volume was light at about 2,700 contracts. Tuesday's session could be similar to Monday's, with a weak early rally giving way to increased pressure as the session progresses.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.47 -$0.02 -$0.33 Dec $0.004
Soybeans: $8.31 $0.02 -$0.57 Nov $0.006
SRW Wheat: $4.53 -$0.01 -$0.53 Dec $0.018
HRW Wheat: $4.42 -$0.02 -$0.55 Dec $0.005
HRS Wheat: $4.90 $0.00 -$0.38 Dec $0.011

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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