DTN Closing Grain Comments

Friendless Corn Falls To New Low

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

General Comments:

Corn closed down 3 1/4 cents in the September contract and down 2 3/4 cents in the December. Soybeans closed down 2 1/4 cents in the September and down 2 cents in the November. Wheat closed up 1/2 cent in the December Chicago, down 1 cent in the December Kansas City, and up 1/2 cent in the December Minneapolis. The September U.S. dollar index is down 0.52 at 92.68. December gold is up $3.80 at $1,295.80 while September silver is up $0.07 and September copper is up 0.0010. The Dow Jones Industrial Average is up 78 at 21,861. October crude oil is up $0.25 at $47.68. October heating oil is down $0.0048, October RBOB gasoline is down $0.0132, and October natural gas is down $0.055.

For the week:

September corn closed down 13 1/4 cents and December closed down 12 1/4 cents. September soybeans were up 1 1/2 cents while the November was up 6 3/4 cents. December Chicago wheat was down 7 1/4 cents, December Kansas City wheat was down 10 cents, and December Minneapolis wheat was down 13 1/4 cents.

Corn:

December corn closed down 2 3/4 cents Friday and was down 12 1/4 cents on the week, falling victim to an obvious lack of buying interest as we get closer to fall harvest. There is no question that this year's corn crop will be smaller than a year ago, but with 2.37 billion bushels of estimated old-crop carry, commercials are in no hurry to buy corn before harvest and show no concern yet about obtaining supplies in the new season. Friday's weather was dominated by concerns of Hurricane Harvey's impact on the Texas coast this weekend. As far as grains are concerned, the lower Mississippi Delta is expected to catch some of the heavy rain and traders will be watching to see if barge traffic is disrupted for more than a few days. Otherwise, the northern and eastern Midwest have the best chances for light to moderate showers the next seven days while temperatures remain mild. With corn crops maturing in the field, December corn continues to trend lower, in line with its seasonal bearish tendency. DTN's National Corn Index closed at $3.06 Thursday, priced 36 cents below the September contract and near its 2017 low. In outside markets, the September U.S. dollar index is down 0.52 after Federal Reserve Chairman Yellen offered no clues about future monetary policy in her speech from Jackson Hole, Wyoming. Energy futures are mixed with oil rigs shut down in the Gulf while Hurricane Harvey threatens the Texas coast.

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Soybeans:

November soybeans closed down 2 cents Friday, but was up 6 3/4 cents on the week with export demand continuing to offer support to prices in the low $9s. Early Friday, USDA said 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to China and 105,500 mt of U.S. soybean meal were sold to Thailand, both for 2017-18. Friday's weather map was fairly quiet across the Midwest while attention is focused on Harvey, expected to be a category three hurricane when it hits the Texas coast late Friday or early Saturday. This week's rains were heaviest in western Missouri and western Iowa and offered some help across central Illinois. This month's rains have been helpful to soybean crops in select areas and may have been just enough to put the fall harvest close to or above last year's record 4.31 billion bushels. Futures spreads are not showing any urgency about the need to obtain soybeans, but November prices in the low $9s have attracted some commercial attention and export demand remains active with FOB soybean prices 11 cents cheaper at the U.S. Gulf than at Brazil. November soybeans currently remain under bearish pressure as harvest gets closer, but have also been able to hold above the June low of $9.07. DTN's National Soybean Index closed at $8.85 Thursday, priced 61 cents below the November contract and holding above its lows in June.

Wheat:

December Chicago wheat ended up 3/4 cent Friday, limiting a 7 1/4 cent loss on the week and may have finally found support near its lowest spot prices in 2017. Spot Chicago wheat prices have fallen $1.50 over the past seven weeks and while that sounds harsh for a year in which U.S. and Canadian wheat production are down, cash SRW wheat prices are still up a little on the year. The problem in the months ahead is that increased production in Russia and Europe have world ending wheat supplies estimated at a new record high and that will be difficult to compete with over the winter. Hurricane Harvey is getting plenty of attention Friday, but with winter wheat planting still weeks away, the storm is not likely to have any significant impact on wheat prices. In the meantime, the seven-day forecast continues to be dry for the northwestern U.S. and is favorable for the final third of spring wheat harvest. With world wheat supplies still plentiful, winter wheat prices are likely to find a sideways range for the rest of 2017 and support should be near -- especially if Friday's CFTC report shows significant liquidation in HRW wheat's noncommercial net longs. DTN's National SRW index closed at $3.82 Thursday, priced 27 cents below the September contract and near its lowest price in three months. DTN's National HRW index closed at $3.40, also near its lowest price in three months.

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

Follow Todd on Twitter @ToddHultman1

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Todd Hultman