DTN Early Word Grains
Wheat Keeps Pushing Higher
December corn was up 2 1/2 cents, November soybeans were down 8 cents, and September Kansas City (HRW) wheat was up 9 cents.
CME Globex Recap:The world's stock markets are taking an early hit Thursday with investors once again pulling away from talk of increased tariffs on China and the repercussions that might bring. Europe's wheat prices continue to surge higher as dry weather concerns persist, but most commodities are lower, including gold and crude oil.
OUTSIDE MARKETS:Previous closes on Wednesday showed the Dow Jones Industrial Average down 81.37 points at 25,333.82 and the S&P 500 down 2.93 points at 2,813.36 while the 10-year Treasury yield ended at 3.00%. Early Thursday, DJIA futures were down 166 points. Asian markets are lower with Japan's Nikkei 225 down 234.17 (-1.0%) and China's Shanghai Composite down 56.51 (-2.0%). European markets are also lower with London's FTSE 100 down 81.14 points (-1.1%), Germany's DAX down 225.74 points (-1.8%), and France's CAC 40 down 45.63 points (-0.8%). The euro was down .0053 and the U.S. dollar index was up 0.31 at 94.97. September 30-year T-Bonds were up 8/32nd while December gold was down $3.30 at $1,224.30 and September crude oil was down $0.55 at $67.11. Soybeans on China's Dalian Exchange were steady to lower and Malaysian palm oil futures were down 0.9%.
| BULL | BEAR | ||
| 1) | Red flag warnings across Montana and eastern Washington go along with expanding drought in the Pacific Northwest. | 1) | Broader rain coverage is expected around the Corn Belt the next seven days. |
| 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) | Milling wheat prices in Europe keep climbing, related to dry weather and are having bullish influence on U.S. wheat prices. | 3) | Investors are having trade war concerns again as the White House considers another increase in tariffs on Chinese goods. |
CORN December corn is up 2 1/2 cents early Thursday, receiving some bullish influence again from higher wheat prices. The latest seven-day forecast however, looks more favorable for row crops with broad rain coverage expected over all, but the western edge of the Corn Belt. Highs in the western Plains will be in the 90s, while temperatures are expected to stay fairly moderate everywhere else. Thursday morning's export sales report will be watched with corn needing to ship 78 million bushels a week for the next six weeks to reach USDA's export estimate for 2017-18 -- a tall order. Fundamentally, the outlook for corn prices is roughly neutral with a big U.S. harvest likely in the fall and USDA expecting lower world ending corn stocks in 2018-19. For now, the downtrend in December corn has been broken and prices are searching for a new trading range.
SOYBEANS November soybeans are down 8 cents early, under pressure once again while the White House considers a new increase in tariffs against Chinese goods. The latest seven-day forecast is also having a bearish effect on prices with beneficial rains expected for most of the Midwest -- just not in the western Plains where temperatures will be hotter. As far as demand goes, USDA expects soybean exports to be down 4% in 2017-18 from the previous year and that is where they seem to be headed with USDA's next report due later this morning. Meanwhile, crush incentives remain high and crush demand is doing well, expected to be up 7% in 2017-18. While trade concerns with China remain a weight on soybean prices, Chinese firms are still apt to find a way to obtain U.S. soybeans this fall. With soybeans setting pods and rain in the forecast, another big harvest looks likely this fall, but there is still weather risk in play. The downtrend in November soybeans has been broken and we now have prices searching for a trading range during a volatile time of year when crops remain sensitive to changes in weather.
WHEAT September K.C. wheat is up 9 cents early Thursday, boosted by a 1.9% gain in the price of Europe's milling wheat as dry conditions remain a concern in Europe. Europe's wheat price is now at its highest level in four years and that is having bullish influence on all three wheat prices here in the U.S. At the same time, here in the U.S., the winter wheat harvest is moving westward and spring wheat crops are encountering hot, dry conditions in the northwestern U.S. and Canadian Prairie with red flag warnings seen across Montana and eastern Washington. Thursday morning's U.S. drought monitor is likely to show worsening drought conditions in the Pacific Northwest. With weather risk still in play in several locations 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: | $3.35 | -$0.07 | -$0.30 | Sep | $0.004 |
| Soybeans: | $8.24 | -$0.16 | -$0.78 | Nov | $0.008 |
| SRW Wheat: | $5.35 | $0.09 | -$0.23 | Sep | $0.049 |
| HRW Wheat: | $5.46 | $0.07 | -$0.18 | Sep | -$0.005 |
| HRS Wheat: | $5.66 | $0.00 | -$0.42 | Sep | -$0.015 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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