DTN Early Word Grains

Grains Start Lower on Solemn Wednesday

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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6:00 a.m. CME Globex:

December corn was down 1 3/4 cents, January soybeans were down 3/4 cent, and March K.C. wheat was down 5 1/2 cents.

CME Globex Recap:

U.S. government offices and stock markets are closed Wednesday for the observance of former President George H.W. Bush's memorial service. The futures contract for the Dow Jones is up 82 points, showing small relief from Tuesday's big drop and the commodity board is mostly lower, except for the softs.

OUTSIDE MARKETS:

Previous closes on Tuesday showed the Dow Jones Industrial Average down 799.26 points at 25,027.07 and the S&P 500 down 90.31 points at 2,700.06 while the 10-year Treasury yield ended at 2.92%. Early Wednesday, DJIA futures are up 82 points. Asian markets were lower with Japan's Nikkei 225 down 116.72 points (-0.5%) and China's Shanghai Composite was down 16.15 points (-0.6%). European markets are lower with London's FTSE 100 down 84 points (-1.20%), Germany's DAX down 95.25 points (-0.8%), and France's CAC 40 down 45.34 points (-0.9%). The euro was up 0.0009 at 1.13062 and the U.S. dollar index was down 0.07 at 96.89. March 30-year T-Bonds were closed Tuesday in honor of the Bush funeral while February gold was down $4.00 at $1244.70 and January crude oil was down 10 cents at $53.15. Soybeans and meal on China's Dalian Exchange were both lower.

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BULL BEAR
1) In spite of doubt and confusion around Saturday's meeting in Buenos Aires, there is still a chance that some trade progress was made. 1) Actual export data has been disappointing for soybeans and wheat, so far. Next update is due early Friday.
2) Cash prices of corn, SRW wheat, and HRS wheat made new highs this week. 2) Anticipated increase in U.S. corn plantings this spring.
3) Language from the White House that China will purchase a "substantial amount of ag products" has lent hope for DDGs and ethanol exports as well. 3) The response in soybean basis and calendar spreads has been muted to the weekend events but should be the first sign demand is surfacing.
4) 4)

MORE COMMODITY-SPECIFIC COMMENTS

CORN March corn is down 1 3/4 cents early, still holding this week's gains, which also means prices are holding above their 100-day average. The seven-day forecast is mostly dry for the Midwest again and may help some late harvest, while heavier rains are expected from Texas to South Carolina. So far, the forecast have been crop friendly in Brazil and Argentina and that remains a concern for corn prices later in 2019, along with the expectation of increased U.S. corn plantings. But there are still many unknowns for new crop prices and plenty of time to learn more. Another two contracts of December corn were delivered overnight -- a light pace.

SOYBEANS March soybeans are down 3/4 cent, not finding much to get excited about early Wednesday. Former President Bush's funeral has government offices and U.S. stock markets closed Wednesday so the next update on grain exports will come out early Friday morning. There is scattered light snow in the eastern Midwest early Wednesday, but the seven-day forecast is mostly dry. For areas drenched by relentless fall showers, the damage has been done and it seems likely USDA will have some lower crop estimate for soybeans on January 11. The larger concern however, is exports and there is still some hope in the market that the Saturday night reference to substantial amounts of ag purchases will bring some relief to the billion bushel (or more) anticipation of soybean ending stocks in 2018-19. Wednesday morning saw 44 new deliveries of December meal and 771 deliveries of December soybean oil.

WHEAT March K.C. wheat is down 5 1/2 cents early Wednesday, falling back from Monday's high without tangible help from export news. The Chicago contract is down 5 cents and March Minneapolis wheat is down 2 3/4 cents early, in spite of more bullish looking activity in the futures spreads -- typically a bullish sign of demand. The next export update will be released Friday and wheat bulls keep hoping the next report will be the one that shows higher exports from this year's lower world wheat production. On the production side, this is a quiet time of year and it is difficult to expect too much of a move out of wheat either direction. There were 343 deliveries of December K.C. wheat early Wednesday and none for Chicago.

DTN Cash Change From National Contract Change from
Commodity Index Prev Day Avg. Basis Month Prev Day
Corn: $3.47 $0.03 -$0.37 Mar -$0.002
Soybeans: $8.24 $0.07 -$0.88 Jan $0.007
SRW Wheat: $4.90 $0.02 -$0.32 Mar $0.003
HRW Wheat: $4.69 -$0.03 -$0.36 Mar -$0.022
HRS Wheat: $5.45 -$0.03 -$0.34 Mar -$0.007

Todd Hultmancan be reached at todd.hultman@dtn.com

Toddcan be followed throughout the day on Twitter @ToddHultman1

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Todd Hultman