DTN Closing Grain Comments

Row Crops Hold Firm as Wheat Falls Lower

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was up 3 1/4 cents in the December contract and up 2 1/4 cents in the July. Soybeans were up 3/4 cent in the November contract and down 1/2 cent in the July. Wheat closed down 14 cents in the December Chicago contract, down 16 1/4 cents in the December Kansas City, and down 14 cents in the December Minneapolis contract. The September U.S. dollar index is up 0.31 at 95.39. December gold is down $8.50 at $1,198.20 while December silver is down 39 cents and December copper is down $0.0725. The Dow Jones Industrial Average is down 33 points at 25,932. October crude oil is up $0.22 at $70.02. October heating oil is up $0.0259 while October RBOB gasoline is up $0.0082 and October natural gas is down 0.092.

Corn:

December corn closed up 3 1/4 cents at $3.68 1/4 Tuesday, finding modest support as rain totals rise in the central Midwest with more expected the next seven days. Flash flood watches and warning stretched from central Kansas to Wisconsin with Iowa and southern Wisconsin getting the most accumulation the past seven days. Tropical Storm Gordon heading toward southern Mississippi is another ill-timed source of rain as corn gets closer to harvest. On the demand side, USDA said corn inspections totaled 2.273 billion bushels as of August 30, 127 million bushels short of USDA's 2.400 billion bushel export estimate. That mildly bearish news, however, was well anticipated and offset by new-crop corn sales that are up 50% from a year ago. With a large corn harvest still anticipated, December corn is holding a sideways range between roughly $3.50 and $3.90. DTN's National Corn Index closed at $3.19 Friday, holding above its low in 2018 and priced 46 cents below the December contract. In outside markets, the September U.S. dollar index is up 0.31 with the U.S. expected to enact another $200 billion of tariffs on Chinese goods, possibly later this week.

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Soybeans:

November soybeans closed up 3/4 cent at $8.44 1/4 Tuesday, also seeing slight benefit from flooding concerns that increased in the central Midwest over the weekend and are supported by another wet seven-day forecast ahead. After mostly pleasant weather through the summer, September's wet start is giving shorts something to think about; but, in the big picture, a record soybean harvest is still highly likely. Also helping soybean prices, December soybean meal closed up $4.00 after Argentina's government announced it needed to increase export taxes on grains and oilseeds to raise revenue. Monday morning, USDA said 28.3 million bushels of U.S. soybeans were inspected for export last week, bringing the total to 2.068 billion bushels as of August 30. That is 42 million bushels short of USDA's goal, but close enough that prices aren't in any worse shape than they already were. On the trade front, the U.S. may be getting ready to enact another $200 billion of tariffs against Chinese goods by the end of this week. As things currently stand, the U.S. and China seem as far apart as ever and there has been no talk yet of China dropping its 25% tariff on U.S. soybeans. Amid wide political uncertainty, November soybeans remain under bearish pressure, but are holding support at $8.25. DTN's National Soybean Index closed at $7.48 Friday, up from its lowest price in ten years and priced 95 cents below the November contract, the weakest basis in 11 years.

Wheat:

December Chicago wheat fell 14 cents to $5.31 1/2 after Russia's Ag Ministry was reported saying that curbing exports on wheat won't be necessary this season. After hearing unconfirmed reports both ways, we can't rule out future flip-flops. More importantly, we can say USDA is expecting 20% less wheat production in Russia this year and that estimate will be updated in next week's WASDE report on September 12. USDA is currently projecting a 4% drop in global wheat production in 2018-19, but there hasn't been any significant pick up in U.S. wheat exports yet. Monday morning, USDA said 14.4 million bushels of wheat were inspected for export last week, putting total inspections down 32% in 2018-19 from last year's low pace. Recent rains in Kansas have created flooding concerns, but for the most part, traders are seeing the rain as beneficial for planting conditions that will become more important later this month. December contracts of all three wheats are under bearish pressure, but are also holding sideways for now. DTN's National SRW Index closed at $4.93 Friday, 53 cents below the December contract and down from its high in 2018. DTN's National HRW Index closed at $5.08 Friday, also down from its highest price in 2018.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow him on Twitter @ToddHultman1

(CZ)

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Todd Hultman