DTN Closing Grain Comments

Soybeans Lower as Some Crops Get a Drink

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

General Comments:

Corn was down 1 1/2 cents in the September contract and down 1 1/4 cents in the December. Soybeans were down 16 cents in the August contract and down 17 cents in the November. Wheat closed down 3 cents in the September Chicago contract, down 4 3/4 cents in the September Kansas City, and down 9 cents in the September Minneapolis contract. The September U.S. dollar index is down 0.01 at 92.69. December gold is down $4.40 at $1,274 while September silver is down 10 cents and September copper is down $0.0055. The Dow Jones Industrial Average is up 16 at 22,032. September crude oil is down $0.35 at $49.24. September heating oil is down $0.0150 while September RBOB gasoline is down $0.0116 and September natural gas is down $0.003.

Corn:

December corn closed down 1 1/4 cents Thursday, challenging, yet still staying above, support at $3.75 while a line of moderate to heavy showers worked its way eastward across Iowa and Minnesota. The rain will be especially helpful to row crops in Iowa where a new patch of severe drought just appeared on Thursday's new U.S. Drought Monitor in the south-central part of the state. Early Thursday, USDA said last week's export sales and shipments of corn totaled 1.4 million and 42.9 million bushels respectively -- a new marketing-year low for sales, but also bullish enough to put total corn shipments up 27% from a year ago. While old-crop corn stocks are keeping prices stable as the 2017 corn crop shows stress, December corn continues to trade within a sideways range and is holding above key support at $3.75. DTN's National Corn Index closed at $3.24 Wednesday, priced 41 cents below the September contract and at the low end of its sideways range in 2017. In outside markets, the September U.S. dollar index is down 0.01, staying quiet ahead of Friday morning's U.S. unemployment report. The U.S. Labor Department said last week's jobless claims were down to 240,000, less than expected, reported RTTNews.com.

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Soybeans:

November soybeans closed down 17 cents Thursday, pressured by a line of moderate to heavy showers that moved eastward through Iowa and Minnesota, headed toward Ontario on Friday. Thursday's rain did not cover all dry areas, but it was an especially timely drink for thirsty soybean crops in Iowa -- over half of which have reached their pod-setting stage. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 8.6 million and 26.2 million bushels respectively, bullish enough to keep total shipments up 19% in 2016-17 from a year ago. Because U.S. soybean prices are staying competitive with Brazil, it is likely that USDA will eventually have to reduce its estimate of ending soybean stocks for 2016-17. Pressured by this week's rains, the short-term trend in November soybeans has turned lower, but crops are still stressed overall and demand is still active and supportive for prices. DTN's National Soybean Index closed at $9.07 Wednesday, priced 70 cents below the November contract and down from its highest prices in four months. Among August contracts, there were 47 deliveries of soybeans, 181 deliveries of meal, and 758 deliveries of soybean oil early Thursday.

Wheat

September K.C. wheat closed down 4 3/4 cents at $4.59 3/4, a price not seen since June 12 when traders were still waking up to drought in the Dakotas. Even though U.S. wheat production will be down in 2017, K.C. wheat prices are now suffering the hangover effects of noncommercial bullishness related to this year's northern drought. Depending on how quickly they liquidate, it may take a couple of weeks to get rid of that hangover before prices regain more solid support. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 5.3 million and 21.4 million bushels respectively, a neutral combination for the week that has total shipments up 22% early in 2017-18, well above USDA's estimate for an 8% decline. Drought in the Dakotas is not getting any better, but wheat prices continue to slide lower in the wake of this year's earlier buying spree. DTN's National SRW index closed at $4.29 Wednesday, priced 32 cents below the September contract and down nearly a dollar from its highest price in two years. DTN's National HRW index closed at $3.97, also down from its highest price in two years.

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

Follow him on Twitter @ToddHultman1

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Todd Hultman