DTN Early Word Grains
Soybeans Take a Step Back, More Tariffs Proposed
December corn was down 1/2 cent, November soybeans were down 12 1/4 cents, and September Kansas City (HRW) wheat was up 5 cents.
CME Globex Recap:Stock markets are lower in China and Europe after CNBC.com reported the White House has proposed increasing $200 billion of tariffs on Chinese goods from 10% to 25%. Other than wheat, nearly all commodities are starting lower early Wednesday. The September U.S. dollar index is a little higher with the Federal Reserve expected to keep interest rates unchanged later Wednesday.
OUTSIDE MARKETS:Previous closes on Tuesday showed the Dow Jones Industrial Average up 108.36 points at 25,415.19 and the S&P 500 up 13.69 points at 2,816.29 while the 10-year Treasury yield ended at 2.96%. Early Wednesday, DJIA futures were down 35 points. Asian markets are mixed with Japan's Nikkei 225 up 192.98 (0.09%) and China's Shanghai Composite down 51.87 (-1.8%). European markets are lower with London's FTSE 100 down 73.37 points (-0.9%), Germany's DAX down 48.07 points (-0.4%), and France's CAC 40 down 2.53 points (-0.05%). The euro was down .0014 and the U.S. dollar index was up 0.06 at 94.61. September 30-year T-Bonds were down 11/32nd while August gold was down $0.60 at $1,223.10 and September crude oil was down $0.68 at $68.08. Soybeans on China's Dalian Exchange were steady to lower and Malaysian palm oil futures were up 0.8%.
| BULL | BEAR | ||
| 1) | The latest seven-day forecast is mostly dry with hotter temperatures at the end of this week. There is also expanding drought in the Pacific Northwest. | 1) | USDA's row crop ratings show local, but not major problems. |
| 2) | IGC estimates expect significant reductions in exportable world ending stocks of corn and wheat in 2018-19. | 2) | Temperatures are expected to stay more moderate in the eastern Corn Belt. |
| 3) | Rising prices of milling wheat in Europe, related to dry weather, have helped turn U.S. wheat prices higher. | 3) | China's 25% tariff on U.S. soybeans is hurting U.S. demand and the White House is proposing higher tariffs on $200 billion of Chinese goods. |
CORN December corn is down 1/2 cent, but still holding near its highest prices in seven weeks with concerns about drier weather ahead. Other than moderate showers around Minnesota this weekend, there is not much rain expected for the Corn Belt the next seven days. Furthermore, the moderate temperatures that helped crops in late July will give way to highs in the 90s west of the Mississippi River by Friday. The heat and drier weather will be the first general crop stress we have seen this year and is expected to continue into the ten-day period west of Illinois. For now, the downtrend in December corn has been broken and prices are searching for a new trading range while we all wait to learn more about the 2018 crop.
SOYBEANSNovember soybeans are down 12 1/4 cents early Wednesday, giving back part of Tuesday's 28-cent gain after the White House proposed to raise the 10% tariff on $200 billion of Chinese goods up to 25%. This comes one day after Bloomberg news reported private talks were taking place between U.S. and Chinese officials and once again muddies the outlook for where this trade dispute is headed. For soybeans themselves, the hotter and drier forecast described above is coming at a time when USDA says 60% of crops are setting pods so the next ten days may have some limiting effect on this fall's crop. As with corn, the downtrend in November soybeans has been broken and we now basically have price movement up for grabs during a volatile time of year when crops a sensitive to weather and demand is hindered by a trade policy that could turn on a dime in either direction.
WHEAT September K.C. wheat is up 5 cents early, seizing the offensive once again while Europe's price of milling wheat sets the tone with an early 1.7% gain. Dry weather concerns in Europe are adding to similar concerns here in the northwestern Plains, southern Canadian Prairie, and Pacific Northwest. The seven-day forecast expects almost no rain west of Minnesota and temperatures will often be in the 90s. That is a distinct contrast from pristine crop ratings that U.S. spring wheat has been seeing until recently and should keep the short side of the wheat market on its heels. With weather risk still in play around the globe, the trends for all three wheats remain up.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.42 | $0.05 | -$0.30 | Sep | -$0.002 |
| Soybeans: | $8.41 | $0.28 | -$0.78 | Nov | -$0.001 |
| SRW Wheat: | $5.26 | $0.08 | -$0.28 | Sep | $0.007 |
| HRW Wheat: | $5.39 | $0.08 | -$0.18 | Sep | -$0.007 |
| HRS Wheat: | $5.65 | $0.04 | -$0.41 | Sep | -$0.017 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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