DTN Early Word Grains 08/20 05:55
Grains Consolidate, Bounce on Crop Immaturity
December corn is up 2 1/2 cents per bushel, November soybeans are up 7
cents, and September K.C. wheat is up 1/4 cent.
By Tregg Cronin
DTN Contributing Analyst
6:00 a.m. CME Globex: December corn is up 2 1/2 cents per bushel, November
soybeans are up 7 cents, and September K.C. wheat is up 1/4 cent.
CME Globex Recap: Mixed equity trade overnight as concerns over a slowing
U.S. and global economy persist. On Monday, President Trump tweeted the Federal
Reserve should cut interest rates by 100 basis points (bp), a much larger cut
than he has previously called for. To be clear, the Federal Reserve hasn't cut
interest rates by 100 bp since the Great Recession in 2007/08. The great irony
here is the demand for lower interest rates might not be necessary if the
global economy wasn't being forced to deal with the U.S.-China trade war.
Overnight, China set a newly minted benchmark lending rate six bp lower at
4.25% as they too try to keep monetary conditions loose amid the worsening
trade row. Grain markets are mostly higher overnight as row crop prices
consolidate just above recent lows. Supply side narratives are hard to change
at this point in the growing season, even if thousands of pictures of immature
corn and soybeans plants are making the rounds on social media. Extended
weather forecasts into September showing frost potential will become popular
the next 10 days. An early end to the growing season remains the best hope for
this market to cut additional supply and stage an extended recovery.
OUTSIDE MARKETS: Previous closes Monday showed the Dow Jones Industrial
Average up 249.78 at 26,135.79 and the S&P 500 up 34.97 at 2,888.68 while the
10-Year Treasury yield ended at 1.598%. Early Tuesday, the September DJIA
futures are down 1 point. Asian markets are mixed with Japan's Nikkei 225 up
114.06 (0.55%) and China's Shanghai Composite down 3.09 points (-0.11%).
European markets are mixed with London's FTSE 100 up 13.45 points (0.19%),
Germany's DAX down 17.05 points (-0.19%) and France's CAC 40 down 2.16 points
(-0.04%). The September Euro is down 0.001 at 1.110 and the September U.S.
dollar index is up 0.039 at 98.260. The September 30-Year T-Bond is up 1/2,
while December gold is up $1.10 at $1,512.70 and September crude oil is up
$0.13 at $56.34. Soybeans on China's Dalian Exchange were up 0.15% while
soybean meal was up 0.21%.
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