DTN Early Word Grains
Row Crops, Wheat Remain Under Pressure Early
December corn was down 2 1/4 cents, November soybeans were down 5 cents, and December K.C. wheat was down 7 1/4 cents.
CME Globex Recap:Major stock markets are off to a quiet start early with a slightly lower U.S. dollar and mixed commodity board outside of ag. The grain sector is mostly red early Wednesday with another day of moderate temperatures helping crops in late August.
OUTSIDE MARKETS:Previous closes on Tuesday showed the Dow Jones Industrial Average up 63.60 points at 25,822.29 and the S&P 500 up 5.91 points at 2,862.96 while the 10-year Treasury yield ended at 2.84%. Early Wednesday, DJIA futures were down 31 points. Asian markets are mixed with Japan's Nikkei 225 up 142.82 (0.6%) and China's Shanghai Composite down 19.22 (-0.7%). European markets are mostly higher with London's FTSE 100 up 11.90 points (0.2%), Germany's DAX down 3.06 points (-0.2%), and France's CAC 40 up 8.83 points (0.2%). The euro was up .0019 and the U.S. dollar index was down 0.14 at 95.01. September 30-year T-Bonds were up 10/32nds while December gold was up $4.20 at $1,204.20 and October crude oil was up $0.77 at $66.61. Soybeans on China's Dalian Exchange were a little higher and Malaysian palm oil futures were closed Wednesday.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Bullish factors are scarce lately, unless this week's trade talks with China spring a surprise. | 1) | USDA estimated a record U.S. soybean crop and record corn yield and August weather has been generally favorable. |
| 2) | IGC and USDA both estimate significant reductions in exportable world ending stocks of corn and wheat in 2018-19. | 2) | The U.S. dollar has pulled back, but still has support from expectations for gradually higher interest rates. |
| 3) | A small bullish inverse in the Dec/Mar meal spread suggests active demand for meal and supports crush demand. | 3) | China still has a 25% tariff on U.S. soybeans. Will this week's meetings in Washington change that? |
CORN December corn is down 2 1/4 cents early Wednesday, possibly headed for a fourth consecutive loss while weather stays friendly for crops in August. Wednesday's weather map is mostly dry with moderate temperatures prevailing. High temperatures will return to the 90s in the southwestern Corn Belt by Friday and rain chances will increase for the central and eastern Corn Belt in the latter part of the seven-day forecast. On the demand side, new-crop corn sales are off to a strong early start, but so far, the anticipation of a big fall corn crop is keeping December corn prices under pressure, holding a sideways trend.
SOYBEANS November soybeans are down 5 cents early, also pressure by favorable conditions around the Midwest with chances for rain in the central and eastern Midwest the next seven days. Traders will be watching for any comments out of Wednesday's meeting between U.S. and Chinese officials in Washington, but official expectations are low and there probably won't be much said until Thursday afternoon's conclusion. The uncertainty of trade relations with China has made assessing soybean prices especially difficult in 2018 and has somewhat paralyzed prices near their lowest level in nine years. Also keeping prices down is the expectation for another record U.S. soybean harvest on the heels of a record Brazilian soybean crop earlier this year. For now, the trend in November soybeans remains sideways while the future of trade with China remains uncertain.
WHEAT December K.C. wheat is down 7 1/4 cents, breaking to a new three-week low as enthusiasm for owning wheat amid dry weather concerns around the world appears to be unraveling. In Europe, December milling wheat is down 2.5 euros or 1.2%. Also pressuring prices, the southwestern U.S. Plains has received beneficial rains the past several days with more expected in Kansas later Wednesday and Thursday. At the same time, drought does remain a concern in the region and hotter temperatures are expected to return Friday. December Minneapolis wheat is down 3 cents while the northwestern U.S. Plains remains mostly dry the next seven days. For winter wheat, the trends have turned sideways.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.28 | -$0.03 | -$0.31 | Sep | -$0.005 |
| Soybeans: | $8.02 | -$0.08 | -$0.84 | Nov | -$0.006 |
| SRW Wheat: | $4.99 | -$0.15 | -$0.28 | Sep | $0.002 |
| HRW Wheat: | $5.15 | -$0.13 | -$0.20 | Sep | -$0.006 |
| HRS Wheat: | $5.39 | -$0.06 | -$0.49 | Sep | -$0.007 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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