DTN Before The Bell Grains

Morning CME Globex Update:

The row crops are moving lower and wheat is moving higher, which is a familiar pattern this September. Harvest delays after excessive recent rain in the Western Corn Belt may be stalling some selling pressure. Energy futures are all higher Monday morning, including ethanol futures.

Other Markets:

Dow Jones:	Lower
U.S. Dollar Index:	Lower
Gold:	Higher
Crude Oil:	Higher

Corn:

Corn futures prices are lightly lower Monday morning with steadily increasing volume as traders and merchandisers arrive at their desks to start the week. It promises to be a week of excitable outside markets, with crude oil prices still surging (WTI as high as $71.89 overnight) and the financial markets tense ahead of Wednesday afternoon's interest rate announcement from the FOMC. The Fed is expected to boost its target interest rate upward toward 2% to 2.25%. The grain markets have their own numbers to be tense about this week: the USDA will release its Sept. 1 Grain Stocks observations this Friday, which may highlight how row crop inventories will accumulate and overwhelm the available space as harvest continues. The December-to-March corn futures spread has been holding steady at 12 cents per bushel. Crop Progress numbers Monday afternoon will show the harvest has been interrupted by rain and flooding in low-lying areas of the Western Corn Belt. National average basis bids remain at 44 cents under the December futures contract, and the DTN National Corn Index was $3.13 Friday, boosted by the end-of-week gains in the futures market and 7 cents better than the average cash price for corn at this time last year.

Soybeans:

No one is more tired of hearing about the U.S.-China trade war than soybean farmers, but that is nevertheless the top topic for the market Monday morning. A stiff new round of tariffs has been imposed on China, which doesn't necessarily affect soybean prices any further, but the prospects for negotiation have deteriorated. Seven-cent losses at the start of the week's futures trade set the soybean market back on its downward trend. The November contract has lost more than $2.48 per bushel from the end of May to last week's low of $8.12 1/4. The DTN National Soybean Index was $7.44 Friday, a reflection of the steady-but-terrible national average basis at $1.03 under the November futures contract. The typical late September average country soybean basis bid over the past 18 years has been more like 54 cents under November futures. USDA reported Monday export sales of 162,000 metric tons of soybeans to unknown destinations for delivery in the 2018-19 marketing year.

Wheat:

U.S. row crops are going to make it through September without any major frost scare, but Canadian farmers were hit with widespread, heavy snow over the weekend. The snow made a logistical mess of the last portions of grain and oilseed harvest in the Canadian Prairies, and may have reduced the quality of standing, mature crops. Now although that snow cover has already mostly melted, the forecast includes more cold, wet weather for the Canadian prairies in the next seven days, and the final loads of their spring wheat crop will be under scrutiny. Futures trade was notably light overnight for Chicago, Kansas City, and Minneapolis wheat contracts, and prices could easily slip lower as the morning proceeds. Wheat prices have been supported this summer by a series of supply shocks from across the globe, but summer is over now, and Canada's snow event won't affect the production total enough to be considered a lastingly bullish influence on prices. DTN's collected SRW Index was $4.76 Friday, (average basis at 46 cents under the December Chicago futures contract); the HRW Index was $4.84 (steady at 41 cents under the December KC contract); and the Spring Wheat Index was $5.19 (steady at 63 cents under the December Minneapolis contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

(KR)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.