DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced a cancellation of previous 4.8 million bushel (130,000 mt) soybean sale to unknown destinations for 2016-17. Corn, soybeans, and wheat were all slightly higher early Wednesday with narrow trading ranges that could last all day while traders wait for Thursday's WASDE report.

Other Markets:

Dow Jones:	Lower
U.S. Dollar Index:	Lower
Gold:	Higher
Crude Oil:	Higher

Corn:

December corn was up a half-cent early Wednesday with grain prices showing no reaction to President Trump's threat to retaliate against North Korea. August gold is trading up $17.20 and stock market futures are modestly lower, but for the most part, outside markets are not showing much reaction to Tuesday's statements. Here in the U.S., there are light showers in the eastern Dakotas early Wednesday, which are expected to bring rain to Minnesota, but the rest of the Corn Belt is mostly dry the next few days. Trading is apt to be restrained again Wednesday while traders wait for what could be a volatile response to Thursday's yield estimates, depending on what USDA says (see Wednesday's report preview by DTN Sr. Analyst Darin Newsom, "Change Is Coming"). So far in 2017, December corn has been unable to sustain an uptrend on weather concerns, but it has also refrained from breaking below support at $3.75. One of those two things could change after Thursday's report. 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.

Soybeans:

At 8 a.m. CDT, USDA announced a cancellation of previous 4.8 million bushel (130,000 mt) soybean sale to unknown destinations for 2016-17. November soybeans were up 1 3/4 cents early within a narrow trading range that may not change much on Wednesday. Dow Jones' survey of analysts expects USDA to estimate soybean yield at 47.4 bushels an acre which is still enough to come up with a 4.2 billion bushel crop, close to last year's record high of 4.31 billion bushels. The latest five-day forecast expects light to moderate showers in the western Plains and Minnesota, heavier amounts across the southern Plains, but misses much of the central Midwest where crops would benefit from a drink. Temperatures remain mild in the week ahead and that is helpful to crops. With a surprise possible in Thursday's WASDE report, November soybeans are staying close the lower end of their five-week range and are still well above June's low of $9.07. 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 was up 2 cents early, also holding in a narrow overnight trading range with just a day to go before USDA releases its next round of production estimates. Given this year's drought in the northwestern Plains, there is still room for USDA's estimate of other spring wheat production to come down, possibly another 30 or 40 million bushels. In the bigger picture however, that kind of reduction could help spring wheat prices stay supported, but doesn't offer winter wheat prices much change in outlook as both U.S. and world wheat supplies are still widely available. The latest seven-day forecast continues to expect moderate to heavy rains from the southwestern Plains to the southeastern U.S. coast. Not surprisingly, the northwestern U.S. remains mostly dry for this year's smaller spring wheat harvest. With lower U.S. wheat production in 2017 offering better support than a year ago, winter wheat prices are currently trying to entice buyers with their lowest prices in seven weeks. DTN's National SRW index closed at $4.28 Tuesday, priced 29 cents below the September contract and still above its previous breakout at $4.18.

ToddHultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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