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DTN Early Word Grains         01/18 05:48

   Stock Markets, Commodities Regaining Lost Ground

   March corn is up 1 3/4 cents, March soybeans are up 4 3/4 cents, and March 
K.C. wheat is up 4 1/4 cents. 

By Todd Hultman
DTN Lead Analyst

6:00 a.m. CME Globex:   March corn is up 1 3/4 cents, March soybeans are up 4 
3/4 cents, and March K.C. wheat is up 4 1/4 cents. 

CME Globex Recap:   The world's stock markets are higher early Friday, 
including the Dow Jones futures as investor concerns about the world economy 
show signs of easing. Crude oil and copper were also higher overnight, along 
with most grain prices. 

OUTSIDE MARKETS:   Previous closes on Thursday showed the Dow Jones Industrial 
Average up 162.94 at 24,370.10 and the S&P 500 up 19.86 at 2,635.96 while the 
10-yr Treasury yield ended at 2.75%. Early Friday, DJIA futures are up 99 
points. Asian markets are higher with Japan's Nikkei 225 up 263.80 (1.3%) and 
China's Shanghai Composite up 36.37 points (1.4%). European markets are higher 
with London's FTSE 100 up 67.72 points (1.0%), Germany's DAX up 109.59 points 
(1.0%), and France's CAC 40 up 52.84 points (1.1%). The March euro was up 0.001 
at 1.146 and the March U.S. dollar index was down 0.02 at 95.69. March 30-year 
T-Bonds were down 8/32nds while February gold was down $7.30 at $1285.00 and 
February crude oil was up $0.78 at $52.85. Soybeans and meal on China's Dalian 
Exchange both showed small gains. 

   

   


   BULL                                         BEAR
1) The seven-day forecast is still hot and   1) After six years of big
   mostly dry for south-central Brazil and      harvests, grain supplies are
   flooding has been a problem in northern      plentiful.
   Argentina -- still stressful to crop
   conditions.
2) Thursday's rally was based on a rumor     2) Given slow export activity,
   that the U.S. may move away from tariffs,    U.S. ending soybean stocks in
   talk that is possible, but far from          2018-19 have a chance to exceed
   certain.                                     one billion bushels.
3) Technically speaking, cash corn and wheat 3) The March 1 trade deadline is
   prices are holding above support.            getting closer and there has
                                                been no breakthrough reported
                                                yet.

MORE COMMODITY-SPECIFIC COMMENTS 

   CORN  March corn is up 1 3/4 cents early Friday, threatening a higher close 
for the week after surviving Tuesday's big sell-off. We won't have CFTC data 
again unless the government reopens one of these days, but in retrospect, 
Tuesday's high volume sell-off now looks like a quick shakeout of impatient 
speculators as there has been no significant change in corn's fundamentals. We 
also can't confirm export activity without USDA's cooperation, but export sales 
have likely been supportive for corn prices the past 28 days, while concerns of 
hot and mostly dry weather in south-central Brazil may become a factor for 
Brazil's second corn crop. For now, the trend in cash corn prices remains up.

   SOYBEANS  March soybeans are up 4 3/4 cents early Friday, adding to 
Thursday's 13 1/4 cent gain, which turned out be related to a rumor. Several 
news sources reported the White House may be considering a plan to drop the 
tariffs against China in an effort to advance trade talks. If true, there is a 
chance China would then drop its 25% tariff on U.S. soybeans, but this scenario 
still has a lot of ifs and maybes so we will have to monitor. If nothing else, 
the rumor unexpectedly put bearish speculators in soybeans on their heels and 
is keeping March soybean prices above their 100-day average. Soybean prices are 
also being helped by persistent forecasts of hot and mostly dry weather in 
south-central Brazil. So far, cash soybeans are holding sideways, below their 
July high. 

   WHEAT  March K.C. wheat is up 4 1/4 cents early, along with gains in the 
Chicago and Minneapolis contracts. Not only are outside markets friendly for 
grain prices early Friday, but wheat may also be benefiting from unconfirmed 
talk of U.S. sales to Egypt. Unfortunately, without the protection of export 
sales reports from USDA, there is no good way to confirm the rumors, but we can 
look and see that March K.C. futures have been holding sideways since their 
November low, showing decent support in spite of the market's bearish mood and 
lack of bullish argument. Similarly, cash HRW wheat prices are holding firm and 
are close to resuming their uptrend -- a possible sign of better than expected 
demand late in 2018-19. 


              DTN Cash   Change From    National      Contract   Change from
Commodity     Index      Prev Day       Avg. Basis    Month      Prev Day
Corn:         $3.48      $0.06          -$0.32        Mar        $0.002
Soybeans:     $8.16      $0.13          -$0.92        Mar        -$0.005
SRW Wheat:    $4.93      $0.05          -$0.25        Mar        -$0.001
HRW Wheat:    $4.80      $0.09          -$0.24        Mar        $0.002
HRS Wheat:    $5.34      $0.07          -$0.38        Mar        -$0.004

   

   Todd Hultman can be reached at todd.hultman@dtn.com 

   Todd can be followed throughout the day on Twitter @ToddHultman1 

   


(KR)

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