DTN Before The Bell Grains

Morning CME Globex Update:

Corn, soybean, and wheat prices remained inside very tight ranges overnight amid extremely light trading volume, and may continue to linger mostly sideways ahead of Thursday's next round of USDA supply-and-demand estimates.

Other Markets:

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

Corn:

Now that the mid-term elections are over, the next thing for the grain markets to worry about is the monthly round of USDA supply-and-demand estimates, which will be released on Thursday, but corn prices show no clear momentum in advance of those numbers. Daily trading volumes have been mild so far this week, and total open interest in corn futures remains flat. There is a general expectation USDA may trim its nationwide corn production estimate, with greater confidence about estimating the crop now that harvest is three quarters complete. Most energy futures markets are moving higher Wednesday morning, and corn may eventually follow along later in the morning. The DTN National Corn Index was $3.37 per bushel Tuesday, showing national average basis stronger at 36 cents under the December futures contract.

Soybeans:

Soybean futures spreads have tightened during recent trading sessions, suggesting commercial traders are still storing huge quantities of soybeans, but these supplies may not be quite as oppressive as once feared. Traders are expecting to see the USDA trim its nationwide soybean production estimate in Thursday's upcoming report, with an average yield guess of 53 bushels per acre. The carry in the futures market for storing soybeans from January to July has gone from 40 cents at the end of October to now 37 cents a week later. Soybean futures prices themselves tested both lightly lower and lightly higher trade overnight and could remain hesitant to pursue a sure direction throughout Wednesday's trading session. There were 249 issues and stops of expiring November futures contracts. The DTN National Soybean Index was $7.85 per bushel Tuesday, showing national average basis stronger at $0.99 under the January futures contract.

Wheat:

A sharply lower dollar Wednesday morning allows dollar-denominated grain prices to move higher, and although wheat futures are up only a penny, these markets have been reliable about moving in the opposite day-to-day direction of the dollar. Tuesday night, as U.S. congressional election results became clear, 10-year Treasury Note futures once again explored interest rates above 3.2 percent. This was the original trigger for the stock market's big October meltdown, but this time, investors appear ready to shrug it off. Stock futures suggest the market is poised to continue its recovery Wednesday morning. The U.S. dollar, therefore, is moving in the opposite direction: downward while investors are less fearful for the global economy and less in need of a safe-haven asset. DTN's collected SRW Index on Tuesday was $4.78 per bushel (34 cents under the December Chicago futures contract); the HRW Index was $4.76 (32 cents under the December KC futures contract); and the Spring Wheat Index was $5.42 per bushel (46 cents under the December Minneapolis futures contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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