DTN Closing Grain Comments

General Comments:

Corn was down 4 3/4 cents in the December contract and down 4 cents in the July. Soybeans were down 9 1/2 cents in the November contract and down 8 3/4 cents in the July. Wheat closed up 4 1/4 cents in the December Chicago contract, up 3 1/4 cents in the December Kansas City, and up 5 cents in the December Minneapolis contract. The December U.S. dollar index is up 0.14 at 94.21. December gold is down $3.00 at $1,202.80 while December silver is down 3 cents and December copper is up $0.0835. The Dow Jones Industrial Average is up 237 points at 26,299. November crude oil is down $0.02 at $68.97. November heating oil is up $0.0027 while November RBOB gasoline is up $0.0133 and November natural gas is up 0.045.

Corn:

December corn dropped 4 3/4 cents to $3.43 1/4 Tuesday, pressured by a mix of commercial and noncommercial selling that is having a difficult time finding anyone to take the long side of the market. It also doesn't help that CFTC found 69,208 net longs on the noncommercial side of corn as of a week ago and they are under pressure to liquidate. Tuesday's weather map showed rain from Nebraska to southern Wisconsin, but the other areas of the Corn Belt were mostly dry and helpful to a harvest effort that USDA said was 9% complete as of Sunday. The demand side of corn is where prices have better hope to trade higher in early 2019, but the current environment is focused on the 14.8 billion bushels of new corn USDA estimates is about to come in. For now, corn remains under harvest pressure and cash prices are pushing closer to last year's low. DTN's National Corn Index closed at $3.05 Monday, near its low in 2018 and priced 43 cents below the December contract. In outside markets, the December U.S. dollar index is up 0.14 while outside commodities are mixed.

Soybeans:

November soybeans fell 9 1/2 cents to a new contract low of $8.14, finding no help from potential buyers at a time when a record soybean crop is about to be harvested and the U.S. just hit China with a 10% tariff on $200 billion of Chinese goods, set to go to 25% on January 1. China responded with $60 billion of its own tariffs, ranging from 5% to 10% on U.S. goods. As tariffs escalate, chances for a short-term trade resolution with the world's largest buyer of soybeans appear unlikely, but it is still not clear how demand for U.S. soybeans will go this year as several countries are finding bargains in the lower U.S. prices. Late Monday, USDA said 6% of soybeans were harvested and Tuesday's weather was favorable for more progress outside of rains in Iowa and southern Wisconsin. Soybean prices clearly remain under bearish pressure with trade an important concern, but it is also fair to wonder how much downside potential exists for prices at their lowest cash levels in 11 years. DTN's National Soybean Index closed at $7.22 Monday, at its lowest price in 11 years and priced $1.02 below the November contract, the weakest basis in at least 11 years.

Wheat:

December Chicago wheat closed up 4 1/4 cents at $5.10 1/2, still finding support near the lower end of this year's trading range. December milling wheat in Europe also helped U.S. prices trade higher, earning a small gain on the day. Late Monday, USDA said 13% of winter wheat was planted, in line with its usual pace. Tuesday likely saw more planting moving forward, but moderate to heavy rains are expected to slow the planting pace later this week. Even so, rain in the southwestern U.S. Plains is rarely a bad thing for crops. In the northwestern U.S., 97% of the spring wheat crop has been harvested and no significant obstacles for the remaining 3% are anticipated. Lower world wheat production will bring better balance to supplies in 2018-19, but it is not clear yet how much, if any, the U.S. might benefit from increased exports. For now, December contracts of all three wheats are holding sideways in a wide range. DTN's National SRW Index closed at $4.60 Monday, 47 cents below the December contract and near its lowest price in two months. DTN's National HRW Index closed at $4.72 Monday, up from its lowest price in two months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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