DTN Before The Bell Grains

Morning CME Globex Update:

A stronger dollar and fresh lows in Malaysian palm oil futures are dragging soybean prices lower Monday morning, while corn and wheat appear to have more stability alongside the volatile gains in crude oil.

Other Markets:

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

Corn:

Corn futures prices will be in danger of losing their light Monday morning gains as the session goes on amid bearish outside markets. Only the U.S. bond markets are closed in observance of Veteran's Day, but treasury futures suggest a stable outlook for interest rates, and the U.S. Dollar Index continues skyrocketing. An overnight burst of bullishness, with the dollar asserting itself as the premier global currency, took the index higher than it's been since June 2017. Crude oil is higher, too, with its own separate concerns, but that's allowing corn prices to remain stable and not be overly affected by the implications of a fresh annual high in the underlying currency. Corn harvest progress tends to bring in about a third as many bushels per day during this later time of year than it was getting back in mid-October. This has been a late and challenging harvest across much of the Corn Belt, and progress will be made in the weekly Crop Progress report, but those numbers won't be released until Tuesday afternoon, due to the federal holiday. The DTN National Corn Index was $3.34 per bushel Friday, showing national average basis stronger at 35 cents under the December futures contract.

Soybeans:

The Malaysian palm oil market has been collapsing, down 10 percent since mid-October, and its losses continued overnight to pressure other oilseeds, like soybeans (down 3 cents). However, soybean futures will be unlikely to follow palm oil all the way to fresh lows, at least while there is uncertainty about how well a conversation will go between the U.S. and Chinese presidents at the end of this month. The weather forecast for the final remainder of soybean harvest sounds cold, and it has enough dry stretches to keep combines running. There were 249 issues and stops of expiring November futures contracts. The DTN National Soybean Index was $7.91 per bushel Friday, showing national average basis at $0.96 under the January futures contract. That's been getting stronger day by day, but basis is still historically weak due to the U.S.-China trade war. At this time last year, national average basis was 15 to 20 cents stronger across the countryside.

Wheat:

Front-month Chicago wheat futures remain on a sideways path, currently above $5.00 per bushel, but bearish fundamentals will continue to dog this market. Speculative 'managed money' traders spent the first few trading sessions of November covering some of their short wheat futures positions, but the resulting upward trend in prices was halted after last week's mid-term elections and the WASDE report, which suggested ever-increasing world wheat inventories. DTN's collected SRW Index on Friday was $4.71 per bushel (31 cents under the December Chicago futures contract); the HRW Index was $4.56 (31 cents under the December KC futures contract); and the Spring Wheat Index was $5.28 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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