DTN Early Word Grains
Wheat Starts Higher, Row Crops See Early Green
December corn was up 3/4 cent, November soybeans were up 4 cents, and December K.C. wheat was up 8 3/4 cents.
CME Globex Recap:Most major stock markets are higher early Wednesday, including those in Asia as investors appear to shrug off trade war concerns. Commodities are mixed, but mostly higher, helped by a lower start in the U.S. dollar. The grain sector has flipped to green early, helped by higher wheat prices in both the U.S. and Europe.
OUTSIDE MARKETS:Previous closes on Tuesday showed the Dow Jones Industrial Average up 184.84 points at 26,246.96 and the S&P 500 up 15.51 points at 2,904.31 while the 10-year Treasury yield ended at 3.05%. Early Wednesday, DJIA futures were up 13 points. Asian markets are higher with Japan's Nikkei 225 up 251.98 (1.1%) and China's Shanghai Composite up 30.90 (1.1%). European markets are mostly higher with London's FTSE 100 down 10.04 points (-0.1%), Germany's DAX up 31.57 points (0.3%), and France's CAC 40 up 21.27 points (0.4%). The euro was up .0034 and the U.S. dollar index was down 0.21 at 94.40. December 30-year T-Bonds were down 8/32nds while December gold was up $4.70 at $1,207.60 and November crude oil was up $0.01 at $69.60. Soybeans on China's Dalian Exchange were moderately lower and Malaysian palm oil futures were down 1.3%.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Bullish factors remain scarce while the market is fixated on the anticipation of big U.S. harvests. | 1) | USDA's latest estimates of 14.8 billion bushels of corn and 4.69 billion bushels of soybeans have paralyzed the buy side of the market. |
| 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) | U.S. soybean crush continues to be a consistent source of demand for soybeans in 2018 while unexpected export demand from countries other than China may be a surprise in 2018-19. | 3) | Tuesday's new round of higher tariffs from both the U.S. and China don't look good for a trade resolution anytime soon. |
CORN December corn is up 3/4 cent early Wednesday, a quiet start to the day after falling to a new contract low on Tuesday. Rain is falling in South Dakota and is expected to move to northern Iowa and southern Minnesota later in the day. The rest of the Corn Belt, however, will be mostly dry, allowing more opportunity for harvest the next five days. 14.8 billion bushels of new corn is a lot to move and facilities will be strained this fall, but world demand is up this year and production was down in South America, leaving the U.S. in a good position to export more corn in early 2019. For now, December corn prices remain under harvest pressure, holding a sideways to lower trend.
SOYBEANS November soybeans are up 4 cents early Wednesday with sellers backing off after four consecutive days lower and taking prices to a new contract low on Tuesday. The outlook for soybeans remains bearish with a record crop being harvested and no sign of the U.S. and China solving their trade disagreements anytime soon. However, cash soybeans at their lowest prices in 11 years looks more like a long-term buying opportunity. What we don't see is any reason to believe the worst is over just yet for soybeans although the seasonal low could come anytime the next couple months. Soybean demand is one area where the market could turn out to be better than expected, and USDA's next weekly report will be out Thursday morning. 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 8 3/4 cents early, encouraged by a 2 1/2 euro gain in Europe's wheat prices and finding support at the lower end of this year's trading range. Winter wheat planting should be making good progress in the U.S. and may dodge some rain the next five days, but generally, that's a good problem to have. Australia's latest concerns from frost over the weekend in western Australia adds to a list of production hits that include the U.S., southern Russia, and Europe. The reductions aren't drastic, but they do show the top seven exporters with their lowest ending stocks-to-use ratios in six years. USDA expects that to bring a 14% increase to U.S. exports in 2018-19, but so far, that remains to be seen as U.S. exports are down 31% from a year ago, ahead of USDA's next report on Thursday. So far, December contracts of wheat remain supported in a sideways trading range after encountering resistance at last year's highs.
| DTN Cash | Change From | National | Contract | ||
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.00 | -$0.05 | -$0.44 | Dec | -$0.003 |
| Soybeans: | $7.12 | -$0.10 | -$1.02 | Nov | -$0.002 |
| SRW Wheat: | $4.64 | $0.04 | -$0.47 | Dec | -$0.003 |
| HRW Wheat: | $4.75 | $0.03 | -$0.41 | Dec | -$0.001 |
| HRS Wheat: | $5.18 | $0.05 | -$0.63 | Dec | -$0.001 |
Todd Hultmancan be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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