DTN Early Word Grains
Row Crops Start Lower After New Tariffs Announced
December corn was down 3/4 cent, November soybeans were down 3 1/2 cents, and December K.C. wheat was down 1 3/4 cents.
CME Globex Recap:Major stock markets are higher in spite of a new round of 10% U.S. tariffs against $200 billion of Chinese goods which are set to go to 25% by the end of this year. Outside commodities are mixed and row crops are lower, enduring steady bearish pressure as harvest season is underway.
OUTSIDE MARKETS:Previous closes on Monday showed the Dow Jones Industrial Average down 92.55 points at 26,062.12 and the S&P 500 down 16.18 points at 2,888.80 while the 10-year Treasury yield ended at 3.00%. Early Tuesday, DJIA futures were up 55 points. Asian markets are higher with Japan's Nikkei 225 up 325.87 (1.4%) and China's Shanghai Composite up 48.16 (1.8%). European markets are higher with London's FTSE 100 up 11.52 points (0.2%), Germany's DAX up 55.37 points (0.5%), and France's CAC 40 up 27.98 points (0.5%). The euro was down .0004 and the U.S. dollar index was up 0.04 at 94.54. December 30-year T-Bonds were up 1/32nd while December gold was down $1.70 at $1,204.10 and November crude oil was up $0.99 at $69.67. Soybeans on China's Dalian Exchange were moderately higher and Malaysian palm oil futures were down 2.0%.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Bullish factors are scarce lately while the market is focused on the anticipation of big row crop harvests | 1) | USDA's latest estimates of 14.8 billion bushels of corn and 4.69 billion bushels of soybeans were big enough to keep buyers away for a while. |
| 2) | Early corn export inspections in 2018-19 are up 25% from a year ago -- a promising start. | 2) | U.S. wheat exports remain sluggish in spite of lower world production in 2018. |
| 3) | NOPA estimated 158.9 mb of soybeans crushed in August, less than expected, but still a new high for that month and a consistent source of demand for soybeans in 2018. | 3) | China still has a 25% tariff on U.S. soybeans and soybean basis continues to widen. |
CORN December corn is down 3/4 cent early Tuesday, still pressured by the anticipation of a big harvest, but not going anywhere fast. Now priced at its lowest level in 2018, December corn is still above last year's low of $3.35 with a better demand outlook after the U.S. gets past harvest, thanks to this year's lower production from Brazil and Argentina and USDA's lower estimate of world ending corn stocks. It is difficult to say how long this year's harvest will keep prices down, but early October is a rough guess, based on prior years. Late Monday, USDA said 54% of the corn crop is mature and 9% has been harvested, ahead of its usual paces. For now, December corn prices remain under pressure, holding a sideways to lower trend.
SOYBEANS November soybeans are down 3 1/2 cents early Tuesday, delving into new low territory after President Trump initiated 10% tariffs against $200 billion of Chinese goods that will go to 25% by the end of this year, reported CNBC.com. China said they will retaliate, facing the promise of more tariffs from the U.S. The world's stock markets don't seem concerned and even the Shanghai Composite Index is trading higher, but cash U.S. soybean prices remain at their lowest level in 11 years as it does not look like China's 25% tariff on U.S. soybeans is coming off anytime soon. In addition to trade concerns, the record high 4.69 billion bushel crop USDA is expecting is enough to keep prices low through this harvest period. USDA said late Monday that 53% of soybeans were dropping leaves and 6% of the crop was harvested. For now, November soybeans remain under bearish pressure with little happening to give potential buyers hope for higher prices.
WHEAT December K.C. wheat is up 1 3/4 cents early, finding some support near the lower end of this year's trading range. USDA said winter wheat planting is 13% complete, in line with its usual pace. Spring wheat harvest is a little ahead of its usual pace and appears to be going well, now 97% complete. Both winter wheat planting and row crop harvest may be interrupted this week by moderate to heavy rains expected throughout the central U.S., but the work will eventually get done as conditions are not expected to be insurmountable. This year's lower wheat production total gives the U.S. and better chance for export activity, but so far, there is little evidence that the U.S. will reach USDA's export estimate of 1.025 billion bushels. December contracts of wheat remain in a sideways trading range after encountering resistance at last year's highs.
| DTN Cash | Change From | National | Contract | Change from | ||
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day | |
| Corn: | $3.05 | -$0.03 | -$0.43 | Dec | $0.005 | |
| Soybeans: | $7.22 | -$0.07 | -$1.02 | Nov | -$0.005 | |
| SRW Wheat: | $4.60 | -$0.04 | -$0.47 | Dec | $0.013 | |
| HRW Wheat: | $4.72 | -$0.03 | -$0.41 | Dec | $0.006 | |
| HRS Wheat: | $5.13 | $0.03 | -$0.63 | Dec | $0.004 |
Todd Hultmancan be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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