DTN Closing Grain Comments

General Comments:

Corn was down 2 cents in the December contract and down 1 3/4 cents in the July. Soybeans were down 7 1/4 cents in the November contract and down 7 cents in the July. Wheat closed down 10 1/2 cents in the December Kansas City contract, down 9 1/2 cents in December Chicago, and down 6 1/2 cents in the December Minneapolis contract.

The December U.S. dollar index is up 0.45 at 96.40. December gold is down $3.50 at $1,233.30 while December silver is down 8 cents and December copper is down $0.0035. The Dow Jones Industrial Average is down 221 points at 24,970. December crude oil is up $0.77 at $67.20. December heating oil is up $0.0101 while December RBOB gasoline is up $0.0018 and December natural gas is down 0.064.

Corn:

December corn lost 2 cents Wednesday, settling at $3.68 1/4 and still not showing much sign of movement this week. The 2018 corn harvest had another good day for progress Wednesday and the seven-day forecast offers further encouragement, except for a few days of light-to-moderate showers around Minnesota and more rain across the southern tier of the U.S., from Texas on east. While harvest remains a challenge, early export demand remains a bullish factor for corn prices and Thursday morning's weekly update should show more of the same. Ethanol demand remains a concern in the year ahead, but got a reprieve Wednesday after the Energy Department said ethanol inventory dropped from 24.1 million barrels (bbl) to 23.9 million bbl as of Oct, 19. With 2.14 billion bushels (bb) of old-crop corn carried forward and another 14.7 bb or more on the way, no one can say the market is short of supply. However, active demand is helping prices stay above their September low, in line with corn's typical seasonal pattern. DTN's National Corn Index closed at $3.29 Tuesday, up from its September low and priced 41 cents below the December contract. In outside markets, the U.S. dollar index is up 0.45, supported by concerns of slower growth in Europe. The Federal Reserve's Beige Book said the majority of Fed districts reported "modest to moderate growth."

Soybeans:

November soybeans closed down 7 1/4 cents at $8.50 1/4 Wednesday, continuing to trade under pressure ever since last Monday's 24-cent jump. Given the excess of rain and snow that fields have seen the last month, it is difficult to assess how much of the anticipated 4.69-bb crop will grade high enough to earn the normal bids offered by elevators around the country. A certain portion from the wetter areas will be either discounted or turned away for use as cheap feed (don't miss Wednesday's "Insurance Pitfalls of Damage" by DTN Farm Business Editor Katie Dehlinger). Exportable supplies of soybeans will be lower than were expected a month ago, and it is interesting that FOB soybean prices in New Orleans have gained in relation the board since early October and are now 45 cents above the November contract. Meanwhile, USDA's weekly export reports have shown no such encouragement with U.S. soybeans shipments down 28% in 2018-19 from a year ago. Thursday morning's update will be closely watched. After the failure of last Monday's rally, the trend in soybeans is back to sideways, holding above its September low. DTN's National Soybean Index closed at $7.57 Tuesday, staying up from its lowest price in 11 years and priced $1 below the November contract, near the weakest basis in at least 11 years.

Wheat:

December Kansa City wheat dropped 10 1/2 cents to $4.97, the lowest close in three months with noncommercial liquidation likely in the face of a rising U.S. dollar. Noncommercials have been net long in K.C. wheat since late January, persuaded by early drought in the U.S. and later followed by crop reductions in Russia, Europe and Australia. Prices have quieted since early August however, as this year's lower production has not been enough to spur U.S. exports. Noncommercial net longs now appear to be running out of patience, judging by Wednesday's new low. On the ground, rain is slowly working its way across the southwestern U.S. Plains and will add to this year's planting difficulties. What had looked like a quiet sideways market is now showing new bearish pressure on K.C. prices. Chicago and Minneapolis wheat remain in sideways trends. DTN's National HRW index closed at $4.71 Tuesday, holding above support at $4.50 and 36 cents below the December contract. DTN's National SRW index closed at $4.71, also holding above support at $4.50.

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

Follow him on Twitter @ToddHultman1

(CZ)

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