DTN Closing Grain Comments

Corn, Wheat Fall to New Lows

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn closed down 4 1/2 cents in the September contract and down 4 1/4 cents in the December. Soybeans were down 7 1/2 cents in the September contract and down 3 cents in the November. Wheat closed down 10 1/2 cents in the December Chicago contract, down 14 1/2 cents in the December Kansas City, and down 8 1/2 cents in the December Minneapolis contract. The September U.S. dollar index is down .01 at 95.53. December gold is up $2.00 at $1,327.90 while September silver is up $0.17 and September copper is down $0.0010. The Dow Jones Industrial Average is up 120 at 18,516. October crude oil is down $0.62 at $47.02. October heating oil is down $0.0121 while October RBOB gasoline is down $0.0310 and October natural gas is down $0.021.

Corn:

December corn posted a new contract low Monday with scattered showers in the central Plains and more rain expected in the next couple days. Overall, the forecast remains friendly for row crops for at least the next ten days and that is keeping a lid on corn prices in spite of last week's smaller crop estimate from Pro Farmer. Monday morning, USDA said last week's inspections of corn for export totaled 56.0 million bushels, a neutral-to-bearish amount that has total inspections 131 million bushels short of USDA's export estimate with only four more business days left in 2015-16. Even though expectations are high for a big record harvest this fall, noncommercial investors were still toying with the long side of corn early last week. Friday's CFTC data showed noncommercials in corn turned back to net long as of Aug. 23 with 2,199 contracts. Commercials remained net long 41,966 contracts, still attracted to corn's cheap prices. December corn remains under bearish pressure with no strong bullish argument as we get closer to fall. DTN's National Corn Index closed at $2.85 Friday, priced 31 cents below the September contract and at its lowest price in 22 months. In outside markets, the U.S. dollar index is down .01 in quiet trading with concerns about some Fed voices pushing for another rate hike in September.

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Soybeans:

November soybeans closed a few cents lower Monday, in spite of a substantial soybean sale announcement and early noncommercial buying in soybean meal. USDA reported no soybean sale announcements last week, but Monday morning's trading turned high after USDA said 14.4 million bushels (393,000 mt) of U.S. soybeans were sold to unknown for 2016-17. Later, USDA said last week's export inspections totaled 33.8 million bushels -- an amount that still gives soybeans a chance to reach USDA's export estimate by the end of August. Friday's prediction from Pro Farmer for a 4.09 billion bushel soybean crop in 2016 was bearish, but not a shock after tour scouts found good yields all week. Friday's CFTC data showed noncommercials increased net longs in soybeans to 179,379 on Tuesday, Aug. 23, just in time to get hit by last week's sell-off after soybean meal broke to a new three-month low. So far, November soybeans are holding sideways above support at $9.43, but that support may become increasingly difficult to hold as we get closer to harvest. DTN's National Soybean Index closed at $9.38 Friday, priced 30 cents below the November contract and near its lowest prices in four months.

Wheat:

December Chicago wheat closed lower again Monday, continuing the free fall of prices that began with Thursday's new contract low. Harvest weather continues to be good in the northwestern Plains for the final third of spring wheat. DTN's seven-day forecast expects rain throughout the southwestern Plains, just in time to help soil moisture for those who still want to plant wheat next month. Friday's CFTC data showed noncommercial net shorts in Chicago wheat at 74,184 as of Aug. 23, down slightly from the previous week. Unlike their typical behavior, commercials reduced net longs from 68,343 to 65,003 last Tuesday and are showing no sign yet of wanting to take on more wheat even though prices are dropping. On the demand side, USDA said last week's inspections of wheat for export totaled 18.8 million bushels, a neutral-to-bullish amount that keeps total inspections in 2016-17 up 27% from a year ago. Unfortunately for wheat producers, there is still no bullish argument in view to lift prices and the recent lack of interest from commercials has pulled support out from under prices. December Chicago wheat remains under bearish pressure with no change in sight. DTN's National SRW index closed at $3.50 Friday, priced 34 cents below the September contract and at its lowest price in nearly seven years. DTN's National HRW index closed at $2.97, at its lowest price in 11 years.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman