DTN Closing Grain Comments

Soybeans Slide Lower

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

General Comments:

Corn was down 2 cents in the December contract and down 1 3/4 cents in the July. Soybeans were down 6 3/4 cents in the November contract and down 4 3/4 cents in the July. Wheat closed up 2 cents in the December Kansas City contract, up 1 cent in December Chicago, and up 4 1/2 cents in the December Minneapolis contract.

The December U.S. dollar index is down 0.05 at 95.38. December gold is up $3.90 at $1,192.50, while December silver is up 10 cents and December copper is up $0.0435. The Dow Jones Industrial Average is down 8 points at 26,479. November crude oil is up $0.76 at $75.05. November heating oil is up $0.0297 while November RBOB gasoline is down $0.0123 and November natural gas is down 0.012.

Corn:

December corn ended down 2 cents at $3.64 1/2 Tuesday, still encountering resistance around $3.70 in spite of heavy rains at harvest time. Tuesday's weather map showed the heaviest amounts adding to flooding concerns from western Oklahoma to Iowa as rains slowly move eastward with severe weather in eastern Oklahoma. After Wednesday, drier weather is expected to return for the remainder of the 14-day period, offering help for better harvest conditions. Thursday's WASDE report is the other concern for traders this week with a slightly higher corn crop estimate anticipated. If there is bullish news for corn in Thursday's report, it will likely come from an increased export estimate. Early Tuesday, USDA said that total corn export inspections were up 62% in 2018-19 from a year ago. For now, December corn prices are trading sideways, holding well above their September low of $3.42 1/2. DTN's National Corn Index closed at $3.24 Monday, up from its September low and priced 43 cents below the December contract. In outside markets, the December U.S. dollar index is down 0.05 with outside commodities mixed. December crude oil is up 76 cents, still near this year's high.

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Soybeans:

November soybeans closed down 6 3/4 cents at $8.63 Tuesday, encountering bearish pressure from an early lack of U.S. soybean exports and a chance that USDA will increase its estimate of soybean production on Thursday. Early Tuesday, USDA said last week's export inspections for soybeans totaled 20.9 million bushels, putting the early total for 2018-19 down 35% from a year ago and reinforcing concerns about the impact of China's tariff on soybean demand. Meanwhile, the early season in Brazil appears to be going well with adequate rains expected in the seven-day forecast. Thursday's soybean crop estimate is expected to show a slight increase from September's 4.69 billion bushels. There may have been some crop loss from this week's flooding, which would not be included in Thursday's numbers, but the amount is not expected to be large enough to make a significant difference. Aside from the trade war risk, the trend in November soybeans has turned sideways and the September low of $8.12 1/4 is holding as potential support. DTN's National Soybean Index closed at $7.66 Monday, up from its lowest price in eleven years and priced $1.03 below the November contract, the weakest basis in at least 11 years. Among October contracts, delivery intentions totaled 34 for soybean meal and 395 for soybean oil early Tuesday.

Wheat:

December K.C. wheat ended up 2 cents at $5.19 1/2, a quiet day of trading on the board while heavy rains fell across the southwestern U.S. Plains, bringing flood warnings to central Kansas and western Oklahoma and severe weather to eastern Oklahoma. Tuesday afternoon's Crop Progress report from USDA will give an update of winter wheat planting progress and the forecast offers better planting conditions after storms move off later Wednesday. On Thursday, USDA will update its estimate of lower world wheat production and the estimate of U.S. wheat exports may see a downward revision. Early Tuesday, USDA said 4.4 million bushels (120,000 mt) of U.S. hard red spring wheat were sold to Bangladesh for 2018-19. Later in the morning, however, USDA also said total wheat export inspections in 2018-19 are running 29% lower than a year ago, a long way from their estimate for a 14% increase. With wheat prices moving toward a quieter time of year, December contracts for all three wheats are holding in a sideways range, supported above their July lows. DTN's National SRW index closed at $4.76 Monday, 38 cents below the December contract and up from its lowest price in two months. DTN's National HRW index closed at $4.79, also up from its lowest price in two months.

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

Follow him on Twitter @ToddHultman1

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Todd Hultman