DTN Closing Grain Comments

General Comments:

Corn closed down 7 1/4 cents in the September and down 7 cents in the December. Soybeans closed down 7 1/2 cents in the September and down 8 1/4 cents in the November. Wheat closed down 16 1/4 cents in the December Chicago, down 15 1/2 cents in the December Kansas City, and down 11 3/4 cents in the December Minneapolis. The September U.S. dollar index is up 0.64 at 95.38. December gold is up $0.40 at $1,325.00 while September silver is up $0.14 and September copper is unchanged. The Dow Jones Industrial Average is down 63 at 18,385. October crude oil is up 0.26 at $47.59. October heating oil is $0.0120 lower, October RBOB gasoline is $0.0031 higher, and October natural gas is up .035.

For the week:

September corn closed down 18 cents while December closed down 18 3/4 cents. September soybeans were down 36 1/4 cents while the November was down 37 1/4 cents. December Chicago wheat was down 37 1/4 cents, December Kansas City wheat was down 28 cents, and December Minneapolis wheat was down 34 1/2 cents.

Corn:

Corn prices fell to their lowest spot close in nearly seven years, a rough finish to a bearish week of trading. Day four of Pro Farmer's Midwest Crop Tour posted corn yields of 188.2 bushels per acre for Iowa and 182.3 bpa for Minnesota. The Iowa estimate was up 4% from a year ago while the Minnesota estimate was down 4%. If we learned anything from this week's tour, it is that USDA's corn yield estimates for Ohio and Nebraska may be too high, but this fall's harvest will still be bearishly large with ending corn supplies set to increase in 2016-17. The tour's final national average estimate is for 170.2 bpa. U.S. corn prices still hold a big export advantage over those in Brazil, but with nearly 15 billion bushels of new corn on the way, December corn prices remain under bearish pressure. DTN's National Corn Index closed at $2.93 Thursday, priced 31 cents below the September contract and near its lowest prices in 22 months. In outside markets, the U.S. dollar index is up 0.64 after Fed Chair Yellen said that the case for another rate hike "strengthened in recent months," but offered no indication of when it might happen. The U.S. Department of Commerce said that real GDP was up .27% in the second quarter and up 1.2% from a year ago, down slightly from last month's estimate and a poor argument for higher interest rates.

Soybeans:

November soybeans closed 8 1/4 cents lower Friday and down on the week after this week's crop tour mostly backed up USDA's slightly higher yield estimate for 2016. Day four of this week's crop tour ended with a pod count of 1,224 for Iowa, up slightly from a year ago. For Minnesota, the soybean pod count totaled 1,108 and was down slightly from a year ago. Pro Farmer issued a national average soybean estimate Friday of 49.3 bpa, slightly higher than USDA's 48.9 bpa. However, traders already saw what they came for and found no new reason to buy soybeans Friday. November soybeans continue to trade within a sideways range, thanks to active demand. Thursday's new three-month low in December soybean meal however, has to be concerning to noncommercials holding long positions as harvest is set to begin next month. A close below $9.50, if it happened, would be a fresh bearish sign for November soybeans. DTN's National Soybean Index closed at $9.46 Thursday, priced 30 cents below the November contract and near its lowest price in three months.

Wheat:

December Chicago wheat posted a new contract low Friday, taking the spot price for Chicago wheat down to its lowest level since September, 2006 -- the very month when the last bull market in grains began. Part of Friday's selling will likely be blamed on Fed Chairwoman Janet Yellen for saying that the case for another rate hike "strengthened in recent months," but the bigger problem for wheat prices is that weather has been broadly accommodative again in 2016 and world supplies are expected to reach their highest level in relation to annual use in 15 years. (By the way, see Friday's Newsom on the Market, "Paper Wheat" by Senior Analyst Darin Newsom.) With a few exceptions, wheat prices have stayed depressed since the fall of 2014 and it may be that long-time holders of wheat are throwing in the towel, no longer willing to wait for the uncertainty of next year. December Chicago wheat remains under bearish pressure. DTN's National SRW Wheat Index contract closed at $3.68 Thursday, priced 34 cents below the September contract and near its lowest price in nearly seven years. DTN's National HRW Index closed at $3.15, near its lowest price in over ten years.

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

Follow Todd Hultman on Twitter @ToddHultman1

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