DTN Before The Bell Grains

Morning CME Globex Update:

Volatility in outside markets, especially crude oil, may eventually affect grain prices longer-term, but so far on Wednesday morning, corn and wheat are quietly higher and soybeans are keeping their chart on a neutral path with 5-cent gains.

Other Markets:

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

Corn:

Due to concerns about the global demand for raw materials amid a contentious trading environment, crude oil prices have fallen more than 20 percent since mid-October, and lost more $4 per barrel already this week, and this bearish outlook weighs on ethanol prices, too. The weekly ethanol production numbers will be released a day late like everything else this week. Core U.S. CPI numbers Wednesday morning showed year-over-year inflation running at 2.10 percent, slightly less than expected. The weekly Crop Progress report showed nationwide corn harvest at 84 percent complete as of Sunday night, or slightly behind its average pace after last week's disruptive snow in the Western Corn Belt. Oil prices are stabilizing Wednesday morning, and corn futures themselves are on their same old sideways path, with December 2018 futures a few cents below $3.70 and December 2019 futures lingering around $4.00 per bushel. The DTN National Corn Index was $3.33 per bushel Tuesday, showing national average basis steady at 34 cents under the nearby futures contract. At 8 a.m. USDA reported 212,000 mt of corn sold to Mexico for delivery in 2018-2019.

Soybeans:

U.S. soybean harvest progress continues to limp toward the finish line, pegged at 88 percent complete at the start of this week, or 5 percentage points behind its average pace. Iowa has nearly caught up with its usual progress by this time of year, but Kansas figures were still 16 percentage points behind average after last week's snow, and Wisconsin and Michigan are also notably behind their typical pace. Soybean futures are a nickel higher Wednesday morning, and it's unlikely the market will pursue fresh lows this month while we wait to see how a meeting turns out between the U.S. and Chinese presidents at the G-20 Summit on November 30. Wednesday is the last trading day for November soybean futures, and there were 326 issues and stops of those expiring contracts. The DTN National Soybean Index was $7.85 per bushel Tuesday, showing national average basis at $0.93 under the January futures contract. Basis continues to get stronger day by day, but it's still historically weak due to the U.S.-China trade war. At this time last year, national average basis was roughly 15 cents stronger across the countryside. At 8 a.m. USDA reported 148,000 mt of soybeans sold to unknown destinations for delivery in 2018-2019.

Wheat:

Total open interest in Chicago wheat futures has fallen 12 percent since the end of October, showing a unique liquidation of speculative 'managed money' while other ag futures markets experienced steady or growing participation. KC futures are leading the wheat gains Wednesday morning, up 3 cents, although trading volume has so far been light overnight and into the early part of the session. Winter wheat planting progress is predictably behind pace after last week's snow in the Southern Plains, and there may be some doubt about how much acreage was even achievable to plant for the 2019 crop. DTN's collected SRW Index on Tuesday was $4.76 per bushel (31 cents under the December Chicago futures contract); the HRW Index was $4.57 (30 cents under the December KC futures contract); and the Spring Wheat Index was $5.34 per bushel (44 cents under the December Minneapolis futures contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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