DTN Early Word Grains
U.S. Wheat Takes Cue From Europe, Starts Lower
December corn was up 3/4 cent, November soybeans were down 3 1/2 cents, and September Chicago wheat was down 4 cents.
CME Globex Recap:China's stock market is higher again early Thursday, but most others are steady to lower. Crude oil is steady after dropping over two dollars Wednesday as traders anticipate new tariffs from China. Most other commodities are mixed early with Chicago wheat prices staying below last year's high ahead of Friday's WASDE report.
OUTSIDE MARKETS:Previous closes on Wednesday showed the Dow Jones Industrial Average down 45.16 points at 25,583.75 and the S&P 500 down 0.75 points at 2,857.70 while the 10-year Treasury yield ended at 2.97%. Early Thursday, DJIA futures were up 11 points. Asian markets are mixed with Japan's Nikkei 225 down 45.92 (-0.2%) and China's Shanghai Composite up 50.31 (1.8%). European markets are mostly lower with London's FTSE 100 down 46.30 points (-0.6%), Germany's DAX up 5.16 points (0.04%), and France's CAC 40 down 14.39 points (-0.3%). The euro was down .0026 and the U.S. dollar index was up 0.12 at 95.20. September 30-year T-Bonds were up 2/32nds while December gold was up $0.80 at $1,221.80 and September crude oil was down $0.07 at $66.87. Soybeans on China's Dalian Exchange were higher and Malaysian palm oil futures were down 0.7%.
| BULL | BEAR | ||
| 1) | Still not much rain in Thursday's seven-day forecast for the western and northern Midwest. Also looking at three days of hot temperatures in the western Plains and northwestern U.S. | 1) | Friday's new crop estimates from USDA likely mean row crop prices have a time of harvest pressure to look forward to. |
| 2) | IGC and USDA both estimate significant reductions in exportable world ending stocks of corn and wheat in 2018-19. | 2) | There is a chance USDA will estimate a record soybean crop and record corn yield in Friday's report. |
| 3) | USDA is likely to reduce its estimate of 2018-19 world wheat production in Friday's WASDE report. | 3) | China's 25% soybean tariff and ongoing trade war show no sign of letting up yet. |
CORN December corn is up 3/4 cent, still not budging from this week's narrow, sideways range while traders wait for USDA's new crop estimates on Friday. Analysts in Dow Jones' survey are expecting USDA to estimate a 14.42 billion bushel crop based on a yield of 176.3 bushels an acre. Given that this year's crop conditions are doing better than a year ago, the expectation may be low, but this is a difficult report to outguess. Thursday morning showers are confined mostly to the southern Plains while the bulk of the Corn Belt stays dry. The seven-day forecast expects more rain across the southern Plains and light amounts in the eastern Midwest, but not much in the western or northern Midwest with hot temperatures the next three days. Thursday morning's export sales report will likely be bearish again for old-crop sales, but new-crop sales a running well ahead of last year. Technically, the downtrend in December corn has been broken and prices appear to have found a more balanced level for a new trading range while traders try to figure out the size of this year's crop.
SOYBEANS November soybeans are down 3 1/2 cents early, still holding a small gain for the week, but not going anywhere in a hurry ahead of Friday's WASDE report. Dow Jones' survey expects USDA to estimate a record 14.42 billion bushel soybean crop, based on a yield of 49.8 bushels an acre and, if true, we are likely to see the usual harvest pressure on prices. Old-crop demand has actually been doing pretty well at these lower prices, given the trade war situation with China and Thursday morning's export sales report likely to show new-crop export sales still well ahead of a year ago. Of course, it is difficult to trust new-crop sales when China is involved until shipments are made and the whole trade war situation makes this a difficult market to assess. As with corn, the seven-day forecast is dry for the northern and western Plains, but the eastern Midwest should be in good shape. For now, the downtrend in soybeans has been broken, but predicting a future direction is a tough while trade policy decisions could swing abruptly in either direction.
WHEAT September Chicago wheat is down 4 cents, still struggling below the 2017 high of $5.74 1/2 as traders try to figure out just how much smaller this year's world wheat crop will be. December milling wheat in Europe is down 2 1/2 euros early. Dow Jones' survey expects USDA to reduce its estimate of world ending wheat stocks from 260.9 to 255.6 mmt (9.4 bb) as dry weather has taken a toll in several wheat regions the past month and is still a concern. Even more important will be to see how the ending stocks estimates of major exporters are doing, especially in Europe. Here in the U.S., the seven-day forecast remains dry for the northwestern U.S. and western Canadian Prairie with extremely hot temperatures stressing crops the next three days and wildfire risk in the Pacific Northwest. With USDA set to give new crop estimates on Friday, 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: | $3.40 | $0.01 | -$0.31 | Sep | $0.001 |
| Soybeans: | $8.31 | $0.04 | -$0.80 | Nov | -$0.004 |
| SRW Wheat: | $5.42 | $0.03 | -$0.28 | Sep | $0.014 |
| HRW Wheat: | $5.65 | $0.04 | -$0.19 | Sep | -$0.005 |
| HRS Wheat: | $5.85 | $0.04 | -$0.48 | Sep | -$0.005 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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