DTN Early Word Grains
Soybeans Show Early Hope for Trade Resolution
December corn was up 2 3/4 cents, November soybeans were up 16 3/4 cents, and September Chicago wheat was up 6 3/4 cents.
CME Globex Recap:Dow Jones futures rebounded from Wednesday's deepest losses by the close and are pointing to a higher opening early Thursday. Potential debt problems in Turkey remain a concern as does this year's trend of rising tariffs, but soybeans and several commodities are starting higher with news that a Chinese delegation will visit the U.S. later in August.
OUTSIDE MARKETS:Previous closes on Wednesday showed the Dow Jones Industrial Average down 137.51 points at 25,162.41 and the S&P 500 down 21.59 points at 2,818.37 while the 10-year Treasury yield ended at 2.85%. Early Thursday, DJIA futures were up 112 points. Asian markets are lower with Japan's Nikkei 225 down 12.18 (-0.05%) and China's Shanghai Composite down 18.07 (-0.7%). European markets are modestly higher with London's FTSE 100 up 41.65 points (0.6%), Germany's DAX up 36.32 points (0.3%), and France's CAC 40 up 23.33 points (0.4%). The euro was up .0020 and the U.S. dollar index was down 0.12 at 96.59. September 30-year T-Bonds were down 13/32nds while December gold was up $1.40 at $1,186.40 and September crude oil was up $0.07 at $65.08. Soybeans on China's Dalian Exchange were lower and Malaysian palm oil futures were up 0.3%.
| BULL | BEAR | ||
| 1) | December soybean meal continues to hold sideways, above its 2018 low with help from commercial buying. | 1) | USDA estimated a record U.S. soybean crop and record corn yield. |
| 2) | IGC and USDA both estimate significant reductions in exportable world ending stocks of corn and wheat in 2018-19. | 2) | Several commodities fell to new lows Wednesday as the rising U.S. dollar and expectations for gradually higher interest rates exert bearish influence. |
| 3) | Thursday's seven-day forecast is still mostly dry for the northwestern U.S. and western Canadian Prairie. | 3) | China's 25% soybean tariff and ongoing trade war show no sign of letting up yet. |
CORN December corn is up 2 3/4 cents early, influenced by Thursday's higher start for most commodities, just one day after commodities showed their most bearish performance this year. Grain prices continue to trade in a volatile market environment with dangerous undercurrents, but for its part, December corn is holding fairly steady in the upper $3s with ongoing help from USDA's estimate for lower ending world corn stocks in 2018-19. Thursday's weekly export sales report is likely to reinforce the idea that old-crop exports will fall short of USDA's target, while new-crop sales continue at a much higher pace than a year ago. As far as this year's corn crop goes, the seven-day forecast is favorable with broad rain coverage and moderate temperatures expected. The trend in December corn remains sideways.
SOYBEANS November soybeans are up 16 3/4 cents early, boosted by news from Associated Press that a trade envoy from China will visit the U.S. later this month in an effort to find agreeable terms. It is difficult not to think of Lucy holding the football for Charlie Brown yet again as this kind of news never fails to generate at least some short-covering in soybeans. The bullish reaction is understandable as prices are at least a dollar lower due to the trade dispute with China, but there is nothing yet to suggest the removal of China's soybean tariff is close at hand. Meanwhile, the seven-day forecast is favorable for row crops and reinforces USDA's estimate of a record soybean crop this fall. The trend in November soybeans remains sideways while the future of trade with China continues to be a big wildcard.
WHEAT September Chicago wheat is up 6 3/4 cents early Thursday, finding early bullish influence from a commodity board that was almost unanimously bearish on Wednesday. It also helps that December milling wheat in Europe is trading up over two euros early Thursday, a reminder that world wheat production will be down at least 4% by USDA's estimate in 2018. Here in the U.S., winter wheat areas are expecting beneficial rains ahead of fall planting, but the northwestern U.S. Plains and western Canadian Prairie remain dry with an active wildfire season out West. One of these days, possibly in early 2019, we expect to see increased U.S. wheat exports, but that is not likely to happen later Thursday morning. For now, 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: | $3.30 | -$0.01 | -$0.31 | Sep | $0.000 |
| Soybeans: | $7.87 | -$0.14 | -$0.82 | Nov | -$0.035 |
| SRW Wheat: | $5.05 | -$0.09 | -$0.27 | Sep | $0.004 |
| HRW Wheat: | $5.16 | -$0.10 | -$0.20 | Sep | $0.003 |
| HRS Wheat: | $5.35 | -$0.13 | -$0.49 | Sep | -$0.002 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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