DTN Before The Bell Grains

Morning CME Globex Update:

Wheat is the only grain market showing any definite direction at 7:45 a.m. CT Monday morning, with mild losses in the Chicago and Kansas City contracts. Corn and soybeans have been mixed through the morning but are likely to experience additional pressure from a stronger dollar as the day goes on. The weekly Crop Progress report is expected to be bearish Monday afternoon.

Other Markets:

Dow Jones: Higher

U.S. Dollar Index: Higher

Gold: Lower

Crude Oil: Lower

Corn:

Even at their lowest point overnight, December corn futures have so far stayed above $3.65, and they have since adopted a slightly higher tone to start Monday morning. The weather forecast remains dry for most of the Midwestern Corn Belt until at least Thursday, which will be helpful to row-crop harvesters. The weekly Crop Progress report to be released Monday afternoon will likely show an astonishing amount of harvesting has been completed since the previous Sunday, when 39% of the corn crop was out of the fields. Any bearish pressure on prices from that consideration should, in theory, have already been placed on the market if the bushels were spot sold at the elevator, but that may not be a very popular marketing strategy this year. The DTN National Corn Index was $3.25 per bushel Friday, showing national average basis steady at 42 cents under the December futures contract.

Soybeans:

Soybean prices are in danger of losing their light overnight gains as the Monday trading session goes on. Recent rain in central Brazil has been considered favorable for their 2019 soybean crop’s early stages of production, and the March soybean futures contract, for instance, fell more than a dime per bushel last week. Also in Brazil, the country’s currency, which can spark up-or-down movements in global soybean prices, has recently gained 15% since its mid-September low. It traded calm and flat last week, but the second round of their presidential election is coming up this Sunday (Oct. 28), and volatility should be expected through the next several trading sessions. In the United States, the nationwide average soybean basis bid remained steady Friday at $1 under the November futures contract. The DTN National Soybean Index was therefore $7.57 per bushel.

Wheat:

Despite ongoing winter wheat production concerns in dry Australia, the peak of the global wheat market’s bullishness seemed to have happened back in August, and wheat futures prices are now content to move in a sideways direction. Chinese stock prices have suddenly surged 4% upward Monday, after the country’s top economic adviser projected confidence and made remarks dismissing the effects of the U.S.-China trade war. That’s helped optimism spill over into other global stock markets, including the U.S. stock market, where indexes are expected to open higher Monday morning. The upshot for wheat futures is that the U.S. dollar index is also climbing higher Monday morning, which is typically bearish to dollar-denominated wheat prices. DTN’s collected SRW Index on Friday was $4.76 per bushel (38 cents under the December Chicago futures contract); the HRW Index was $4.80 (37 cents under the December KC futures contract); and the Spring Wheat Index was $5.32 per bushel (stronger basis at 56 cents under the December Minneapolis contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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