DTN Closing Grain Comments

Wheat, Soybeans Lead Crop Prices Higher

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

General Comments:

Corn was up 2 1/2 cents in the December contract and up 2 1/4 cents in the July. Soybeans were up 16 cents in the November contract and up 15 cents in the July. Wheat closed up 12 cents in the December Chicago contract, up 10 1/4 cents in the December Kansas City, and up 7 3/4 cents in the December Minneapolis contract.

The December U.S. dollar index is down 0.09 at 94.13. December gold is up $5.70 at $1,208.60 while December silver is up 10 cents and December copper is down $0.0045. The Dow Jones Industrial Average is up 199 points at 26,446. November crude oil is up $1.12 at $70.71. November heating oil is up $0.0131 while November RBOB gasoline is up $0.0146 and November natural gas is down 0.011.

Corn:

December corn ended up 2 1/2 cents at $3.45 3/4 Wednesday, reluctantly influenced by bigger gains in soybeans and wheat while crops are being harvested. Harvesters face a week in which they may be playing dodgeball with the rain. Rain fell over South Dakota and northern Iowa Wednesday with more amounts expected in the Northern and Southern Plains the next five days. Forecasts are rarely exact, so some local areas may still get a lot done this week in between heavier showers. On the demand side, USDA will have its next weekly export sales report Thursday morning and expectations are high for corn this season after South America had lower production earlier this year. For now however, the optimism of higher corn demand is being outweighed by the near-term anticipation of 14.8 billion bushels of new supplies on the way. Cash corn prices remain under harvest pressure and are within a dime of last year's low. DTN's National Corn Index closed at $3.00 Tuesday, near its 2017 low and priced 43 cents below the December contract. In outside markets, the December U.S. dollar index is down 0.09, holding steady after Tuesday's new tariffs were announced by the U.S. and China. Outside commodities are mostly higher.

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Soybeans:

November soybeans closed up 16 cents at $8.30 Wednesday, erasing Tuesday's loss as traders seemed to shake off the latest round of new tariffs from the U.S. and China. Aside from the politics, cash U.S. soybeans trading at their lowest prices in eleven years makes them a potential target for anyone looking for a bargain, including other soybean consuming countries. So far however, weekly export sales and shipments of soybeans are even with last season's pace and Thursday will have the next update. On the production side, there is little argument that soybean crops are looking good this year and USDA's estimate of a record high 4.69 billion bushel crop continues to weigh on prices along with trade issues. In spite of all the bearish forces at work, it is also fair to wonder how much downside potential exists for prices near their lowest cash levels in eleven years. DTN's National Soybean Index closed at $7.12 Tuesday, at its lowest price in eleven years and priced $1.02 below the November contract, the weakest basis in at least eleven years.

Wheat:

December Chicago wheat finished up 12 cents at $5.22 1/2 Wednesday, in line with gains in the other two U.S. wheats and also supported by a 3 1/4 euro (1.6%) gain in Europe. As mentioned in Wednesday's Market Weather Outlook video with Senior Ag Meteorologist Bryce Anderson, dry conditions are being seen for the start of winter wheat planting in Europe and Russia, along with the dry conditions and frost damage already discussed for Australia. Here in the U.S., soil moisture has improved in the southwestern U.S. Plains where winter wheat planting is taking place, but drought still remains a concern in the region. These weather concerns plus lower wheat production in 2018 appears to be giving prices enough support to hold steady in their wide, sideways range. DTN's National SRW index closed at $4.64 Tuesday, 47 cents below the December contract and near its lowest price in two months. DTN's National HRW index closed at $4.75 Tuesday, 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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Todd Hultman