DTN Before The Bell Grains

Calm Start for the Grain Trading Week

Elaine Kub
By  Elaine Kub , Contributing Analyst
(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

A weaker U.S. dollar Monday morning is supportive to wheat prices and other grain futures prices. Soybean traders may continue to add in risk premium based on concerns about crop losses during a wet and snowy harvest, but they haven't done so overnight.

Other Markets:

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

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Corn:

Prior to last Thursday, the December corn chart hadn't ventured above $3.70 since August, and although futures prices dipped slightly overnight, they are still above that $3.70 level, suggesting a gradual harvest timeframe recovery. For farmers who may feel pressured to sell physical corn off the combine for cash needs, the average flat price bid was $3.30 Friday, which compares favorably to the DTN National Corn Index from this time last year (at $3.05 per bushel) or 2016 (when it was $2.95 per bushel). DTN is forecasting a drier weather pattern for the Midwest and the Northern Plains over the next 7 to 10 days, which should help corn harvesters pick up the pace, although they're having to slide through muddy fields. According to last week's Crop Progress numbers, the nationwide corn harvest never really fell behind its average pace, but local experiences may have varied. Another weekly Crop Progress report will be released Monday afternoon.

Soybeans:

Uncertainty will remain in the soybean market regarding how much damage has been done to the U.S. soybean crop during the recent stretch of wet (and SNOWY!) weather, but futures prices are lightly lower at the start of Monday's trade. High water on the Mississippi River has closed multiple locks and stopped barge traffic. A NOPA crush report will be released Monday at 11 o'clock (Central), and is expected to reflect the generally improving crush margins through the month of September. The average trader estimate is looking for 157.4 million bushels of crushed soybeans. In the cash grain market, the nationwide average soybean basis is still historically weak at $1.02 under the November futures contract, putting the DTN National Soybean Index at $7.65 per bushel.

Wheat:

Winter wheat futures prices were lightly higher Monday morning, encouraged by a lower U.S. Dollar Index that remained stable inside known trading ranges overnight. The peak of the interest rate panic seems to have passed, with 3.24 percent standing as the highest interest rate implied for the 10-year Treasury Note last Wednesday afternoon. The 10-year rate is more like 3.14 percent at the start of this week. Welcome rain has been falling in Australia lately, but too late the improve the wheat-producing prospects for most regions, and even Western Australia farmers are considering baling some of their wheat crop instead of harvesting it for grain in coming weeks. Rain is also falling on the U.S. Southern Plains, pushed by Tropical Storm Sergio, and although it disrupts winter wheat planting progress, moisture is welcome in the region to help it recover from the Moderate to Extreme Drought seen just a few weeks ago. DTN's collected SRW Index was $4.78 per bushel Friday (or 39 cents under the December Chicago futures contract), the HRW Index was $4.86 (38 cents under the December KC futures contract), and the Spring Wheat Index was $5.39 per bushel (57 cents under the December Minneapolis contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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Elaine Kub