DTN Closing Grain Comments

General Comments:

Corn was down 2 3/4 cents in the September contract and down 2 cents in the December. Soybeans were unchanged in the September contract and up 1 cent in the November. Wheat closed down 10 1/4 cents in the September Chicago contract, down 7 cents in the September Kansas City, and up 15 1/4 cents in the September Minneapolis contract.

The September U.S. dollar index is down 0.30 at 93.52. December gold is up $8.50 at $1,288.20 while September silver is up 36 cents and September copper is up $0.0790. The Dow Jones Industrial Average is up 23 at 22,016. September crude oil is down $0.70 at $46.85. September heating oil is down $0.0283 while September RBOB gasoline is down $0.0183 and September natural gas is down $0.043.

Corn:

For the third straight session, the new crop December corn futures contract touched a fresh 2017 low, on Wednesday at $3.63 1/4. Speculative traders, including hedge funds, were seen as the driving force of the market's lower movement. Earlier this summer, that segment of the market built up a net-long position in corn futures, but in recent weeks they have been shedding those long positions alongside a seasonal expectation for corn prices to decline toward the harvest timeframe if production projections remain abundant. Presumably, not everyone among the trading population really buys into USDA's projection for nationwide corn yields to average 169.5 bushels per acre in 2017, but nevertheless, the yield outlook looks bearish this week. A favorable precipitation forecast up and down the center of the U.S. Corn Belt will be supportive to grain fill at this stage in the growing season.

Soybeans:

Nearby soybean oil futures closed the session up 0.14 cents in a reminder that demand for soy products is an underlying fundamental source of support for soybean prices. That spillover influence allowed soybean futures to shrug off the bearishness of the feed grain sector and end the day with a small upward correction. The downward trend of the past five weeks remains firmly in place, however, still in line with soybeans' seasonal tendencies. The precipitation forecast through the weekend calls for over an inch of rain across many regions of Nebraska and Iowa, which will surely welcome it while they are still classified as D1 or D2 drought on the U.S. Drought Monitor. This is an especially critical time for pod-filling soybean plants to receive timely rains, and if condition ratings improve in line with the expected weather, there is certainly the potential for soybean futures to turn lower again during upcoming trading sessions. Support might be pegged at late June's low of $9.07 on the November soybean futures chart.

Wheat

Wheat futures in Chicago received the heaviest selling pressure of all the grain markets Wednesday, with upward of 7,000 contracts being liquidated by the funds during this session. The nearby September contract ended the session down by double digits, and the calendar spreads bearishly widened, reinforcing the idea that there is an overabundance of newly harvested winter wheat which needs to pay for storage space to be kept off the market for the next several months. The spring wheat market, however, does not share that concern. In fact, the rain forecast which was interpreted so bearishly by the corn and soybean traders on Wednesday is actually heaviest in central Minnesota, which was already somewhat behind its average pace of spring wheat harvest. Up to two inches may fall before the weekend is over, further complicating the quality and availability of a highly sought-after crop. Minneapolis spring wheat futures closed the session up 14 1/4 cents Wednesday, but that's an independent direction that doesn't provide spillover influence to the other wheat markets.

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

Follow Elaine on Twitter @elainekub

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