DTN Closing Grain Comments

General Comments:

Corn was up 2 1/2 cents in the September contract and up 2 1/2 cents in the December. Soybeans were down 1 cent in the September contract and unchanged in the November. Wheat closed up 2 1/2 cents in the September Chicago contract, up 3 1/4 cents in the September Kansas City, and up 2 3/4 cents in the September Minneapolis contract. The September U.S. dollar index is down 0.07 at 93.44. December gold is up $17.50 at $1,280.10 while September silver is up 47 cents and September copper is down $0.0145. The Dow Jones Industrial Average is down 69 at 22,016. September crude oil is up $0.27 at $49.44. September heating oil is up $0.0171 while September RBOB gasoline is down $0.0071 and September natural gas is up $0.069.

Corn:

December corn closed up 2 1/2 cents on a quiet day of trading with many sitting out, waiting for USDA's WASDE report to be released Thursday at 11 a.m. CDT. If we take a breath and step back, we see a corn market with 2.37 billion bushels of estimated old-crop carry and a new crop in 2017 on at least 3 million fewer acres that is not doing as well as crops from the previous four years. Going by USDA's crop ratings, this is the seventh worst crop since 2000, but those crop ratings will become obsolete Thursday when USDA releases its first field-based yield estimate -- a number that Dow Jones' survey is estimating at 166.0 bushels an acre. If true, that would trim roughly 400 million bushels off the estimate of new-crop ending corn stocks, but still leave ample supply for unhindered commerce. The catch of course, is that USDA may have a surprise in Thursday's numbers that we will be watching for and that possibility kept trading cautious on Wednesday. December corn continues to trade within a wide, sideways range with important support not far off at $3.75. DTN's National Corn Index closed at $3.29 Tuesday, priced 41 cents below the September contract and staying within its sideways range in 2017. In outside markets, December gold is up $17.50 on tensions with North Korea, but the September U.S. dollar index was quiet, trading down 0.07.

Soybeans:

November soybeans ended unchanged Wednesday, also experiencing a quiet day of trading ahead of Thursday's WASDE report. USDA briefly interrupted the quiet mood at 8 a.m. CDT when it reported a cancellation of previous 4.8 million bushel (130,000 mt) soybean sale to unknown destinations for 2016-17. Prices however, showed little response to the news, which came on the heels of Monday's 7.6 million bushel (206,000 mt) sale of old-crop soybeans, also to unknown. Similar to corn, adverse weather has likely hurt soybean yields in 2017 and USDA will give its first field-based yield estimate Thursday morning. Dow Jones' survey expects USDA to quote 47.4 bushels an acre, down from last year's record high 52.1 bushels. Of course, there is plenty of uncertainty around what USDA will actually say, but keep in mind that with record soybean plantings, even the Dow Jones estimate would produce a big, 4.2 billion bushel crop. The bullish news for soybeans in 2017 has been active export demand and that will likely continue in spite of Wednesday's cancellation because FOB soybean prices are 15 cents cheaper at the U.S. Gulf than at Brazil's ports. For now, November soybeans have pulled back to the lower end of their five-week range, waiting for Thursday's report. DTN's National Soybean Index closed at $9.06 Tuesday, priced 67 cents below the November contract and holding sideways, above $8.80. Among August contracts, there were 114 deliveries of soybeans, 120 deliveries of meal, and 114 deliveries of soybean oil early Wednesday.

Wheat:

September Chicago wheat closed up 2 1/2 cents, waiting like the other grains for Thursday's WASDE report. The two report highlights for wheat will likely be USDA's estimates of other spring wheat production and world ending wheat stocks -- both of which have room to come down. Given this year's drought in the northwestern Plains, a 30 or 40 million bushel reduction off the July estimate of 423 million bushels seems like a fair guess for spring wheat production. World wheat production could also be trimmed slightly and there is potential for a larger estimate of world demand. Put it all together however, and total wheat supplies are still plentiful in the U.S. and around the world -- a finding that futures spreads also agree with. Lower U.S. wheat production has been helpful to this year's wheat prices, but another sideways range is likely for winter wheat in the weeks ahead. DTN's National SRW index closed at $4.28 Tuesday, priced 29 cents below the September contract and near its lowest prices in seven weeks. DTN's National HRW index closed at $3.93, near its lowest prices in eight weeks.

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

Follow him on Twitter @ToddHultman1

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