DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced China cancelled 23.6 million bushels (640,970 mt) of U.S. soybean sales for 2016-17. 412,000 bushels (11,220 mt) of U.S. soybeans were sold to unknown destinations for 2016-17 and another 10.4 million bushels were sold to unknown for 2017-18. December soybean oil was up 0.75 early Wednesday after the U.S. Commerce Department set a retroactive duty on biodiesel imports from Argentina and Indonesia.

Other Markets:

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

Corn:

December corn was up 2 1/4 cents early Wednesday, an early bounce after prices came close to last year's low of $3.58 1/2. The forecast has turned drier for the week ahead with the only chance of rain seen around Minnesota where crop conditions have already been high, but more growing degree days would be welcome. While the Corn Belt is expected to be drier the next seven days, temperatures are staying mild for the rest of August and that is helping crops. On the demand side, FOB corn prices are 14 cents cheaper at Brazil's ports than at the U.S. Gulf so U.S. corn exports are likely to stay low for at least the next several weeks and maybe through the rest of 2017. This fall's corn harvest will be down from a year ago, but somewhere near 13.8 billion bushels is enough to keep prices under bearish pressure during this time of year when prices typically sag toward their seasonal low. On cue, December corn remains under bearish pressure, trading near its lowest prices of the year. DTN's National Corn Index closed at $3.09 Tuesday, priced 37 cents below the September contract and at a new 2017 low. In outside markets, the September U.S. dollar index is down 0.22, staying near its lowest prices in two years ahead of Friday's speeches from Federal Reserve President Yellen and European Central Bank President Draghi.

Soybeans:

(640,970 mt) of U.S. soybean sales for 2016-17. 412,000 bushels (11,220 mt) of U.S. soybeans were sold to unknown destinations for 2016-17 and another 10.4 million bushels were sold to unknown for 2017-18. Before the announcements, November soybeans were up 8 1/2 cents, benefiting from the U.S. Commerce Department's move to enact a retroactive duty against biodiesel imports from Argentina and Indonesia (see Tuesday's DTN article, "Retroactive Duty Imposed" by Staff Reporter Todd Neeley). December soybean oil was up 0.75 at the morning break after the Commerce Department explained steep cash deposits will be collected from biodiesel importers which cover the past 90 days of imports from Argentina and Indonesia. Meanwhile, the next seven days look drier across the Midwest and the guessing games continue for this year's row crops. On the demand side, soybean prices continue to support more U.S. export business and even with Wednesday's cancelled sale, at least one more reduction in USDA's estimate of old-crop ending soybean stocks is likely. With a record soybean crop still possible, November soybeans remain under bearish pressure, but are doing well to trade above their June low at $9.07 with help from light commercial support in the low $9s. DTN's National Soybean Index closed at $8.76 Tuesday, priced 61 cents below the November contract and holding above its lows in June.

Wheat:

December Chicago wheat was up 3 cents early, another attempt at bargain-hunting with cash SRW wheat prices at their lowest levels in over three months. Yes, we have seen these early starts to the day fail many times this month as the market has had a difficult time generating support, but it is also true that support often shows up when traders are exasperated and on that count, winter wheat seems like a prime candidate for finding a low. Friday's weather map shows light showers scattered around Texas and Oklahoma with moderate amounts expected in the Texas Panhandle the next seven days. The forecast for the rest of the southwestern Plains and northwestern U.S. is mostly dry which will help the final third of spring wheat harvest. Seasonally, winter wheat prices tend to drag lower until mid-November when the lights go down on the Northern Hemisphere, but given this month's plunge to new lows, a sideways trading range should be found before then. DTN's National SRW index closed at $3.74 Tuesday, priced 28 cents below the September contract and at its lowest price in three months.

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

FollowTodd on Twitter @ToddHultman1

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