DTN Closing Grain Comments

General Comments:

Corn was up 1/4 cent in the December contract and down 1/4 cent in the July. Soybeans were up 1 1/4 cents in the November contract and up 1 cent in the July. Wheat closed up 17 cents in the December Chicago contract, up 16 cents in the December Kansas City, and up 10 cents in the December Minneapolis contract.

The September U.S. dollar index is down 0.22 at 95.10. December gold is up $0.70 at $1,201.10, while December silver is up 4 cents and December copper is up $0.0035. The Dow Jones Industrial Average is down 31 points at 25,886. October crude oil is down $0.26 at $67.49. October heating oil is down $0.0020 while October RBOB gasoline is down $0.0097 and October natural gas is up 0.025.

Corn:

December corn ended up 1/4 cent at $3.67 1/4 Monday, staying cautious in a narrow, sideways range ahead of Wednesday's WASDE report from USDA. Dow Jones's pre-report survey is expecting a slightly smaller corn crop estimate of 14.51 billion bushels from USDA Wednesday and a reduction in the estimate of U.S. ending stocks for 2018-19, from 1.684 to 1.590 billion bushels. Last week's rain pushed through the eastern Midwest over the weekend, leaving the Corn Belt with a dry and warm outlook for at least the next seven days -- better preparation for harvest conditions. On the demand side, USDA showed 25.9 million bushels of corn export inspections for the first six days of the new 2018-19, a neutral start that is too early to learn much from. There is hope for better corn export demand the next six months or more, however, thanks to Argentina's drought earlier this year and increased world demand, which USDA will also be updated on Wednesday. December corn continues to hold a sideways range between roughly $3.50 and $3.90. DTN's National Corn Index closed at $3.24 Friday, holding above its low in 2018 and priced 43 cents below the December contract. In outside markets, the September U.S. dollar index is down 0.22 and most other commodities are trading higher.

Soybeans:

November soybeans closed up 1 1/4 cents at $8.45 1/4 Friday, finding just enough support to keep prices above their July low of $8.26 1/4. Part of Monday's buying may have been related to shorts showing nervousness ahead of Wednesday's WASDE report. However, according to Dow Jones's survey, USDA's new estimates are likely to keep a bearish mood with a higher soybean crop of 4.659 bb, based on a record high yield of 52.5 bushels per acre. World ending soybean stocks are also expected to get a boost from USDA for 2018-19, from 105.9 to 107.5 (3.95 bb), but keep in mind Argentina's president just raised export taxes last week, leaving the U.S. as the main supplier of soybeans and meal as Brazil's supplies are dwindling into fall. Monday morning, USDA said 30.6 million bushels of soybeans were inspected for export the first six days of September, a slightly bearish amount that doesn't mean much this early in the new season. USDA also said 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to unknown destinations for 2018-19. Amid the uncertainty, November soybeans remain under pressure, but are still managing to hold above support at $8.25, a possible sign of price inelasticity. DTN's National Soybean Index closed at $7.46 Friday, near its lowest price in ten years and priced 98 cents below the November contract, the weakest basis in 11 years.

Wheat:

December Chicago wheat closed up 17 cents at $5.28 1/4 Monday, helped by news from Australia that ABARES reduced its estimate of wheat production in 2018-19 to 19.0 mmt based on dry weather, a number which is below USDA's current estimate of 22.0 mmt. That is one more reason for USDA to reduce its estimate of global wheat production on Wednesday, but according to Dow Jones' pre-report survey of analysts, expectations for a significant reduction in world ending wheat stocks are low. The survey expects 2018-19 ending world stocks to drop from 259.0 to 257.2 mmt (9.45 bb) while ending stocks in the U.S. are expected to increase slightly, to 938 million bushels. So far, generating export business in the U.S. has been a problem and that continued Monday morning. USDA said 15.8 million bushels of wheat were inspected for export last week, putting total inspections down 31% from last year's low pace. With Wednesday's WASDE report possibly holding a surprise for wheat, December contracts of all three wheats are holding sideways in a wide range. DTN's National SRW index closed at $4.65 Friday, 46 cents below the December contract and down from its high in 2018. DTN's National HRW index closed at $4.72 Friday, also down from its highest price in 2018. Among September grain futures, corn shows the most open interest ahead of Friday's expiration, at 1,651 contracts.

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

Follow him on Twitter @ToddHultman1

(CZ)

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