DTN Closing Grain Comments

General Comments:

Corn was down 2 3/4 cents in the September contract and down 2 1/2 cents in the December. Soybeans were down 3 3/4 cents in the September contract and down 3 1/4 cents in the November. Wheat closed down 7 1/4 cents in the December Chicago contract, down 6 3/4 cents in the December Kansas City, and down 5 cents in the December Minneapolis contract.

The September U.S. dollar index is down 0.56 at 92.12. December gold is up $18.00 at $1,315.90 while September silver is up 41 cents and September copper is up $0.0325. The Dow Jones Industrial Average is down 29 at 21,785. October crude oil is down $1.49 at $46.38. October heating oil is up $0.0036 while October RBOB gasoline is up $0.0318 and October natural gas is up $0.031.

Corn:

December corn closed down 2 1/2 cents, continuing its August slide lower as commercials continue to stay away from the market with harvest getting closer. Friday's CFTC data showed noncommercials cut back net longs in corn from 103,259 to 70,508 as of Aug. 22, but for some reason, traders continue to hang on to their losing positions and remain a bearish source of liquidation in the market. The Midwest was peppered with scattered light showers over the weekend with moderate amounts in northern Missouri. Most of the Midwest will not see rain this week, except for the moderate to heavy amounts that push up the lower Mississippi River and reach into the Ohio River Valley. There is some concern about a disruption of grain movement down the Mississippi River this week, but so far, no major problems are reported. Monday morning, USDA said 31.7 million bushels of corn were inspected for export last week, putting total inspections 17 mb shy of USDA's estimate with one week left in the season. Earlier, USDA said 6.3 mb (160,020 metric tons) of U.S. corn was sold to Mexico for 2017-18. As has been true through August, the anticipation of this year's corn harvest is keeping December corn prices under bearish pressure with no sign yet of commercial interest for prices that are now near $3.50. DTN's National Corn Index closed at $3.02 Friday, priced 37 cents below the September contract and near its lowest in nine months. In outside markets, December cotton is up 1.68 cents, October RBOB gasoline is up 2.86 cents, and the September U.S. dollar index is down 0.56 after Hurricane Harvey produced massive flooding in southeastern Texas over the weekend.

Soybeans:

November soybeans closed down 3 1/4 cents Monday, keeping a low profile as public attention turned to Hurricane Harvey over the weekend. Monday afternoon's Crop Progress report may show a slight improvement in soybean crop ratings after more rain fell over the western and central Midwest last week, but parts of Illinois and other select areas remain dry and are keeping this year's conditions variable. The best rain chances this week are in the eastern Midwest, but the rain may stay south of central Illinois. On the demand side, USDA said 26.3 mb of soybeans were inspected for export last week, putting total inspections 54 mb short of USDA's export estimate with one week remaining in 2016-17. Friday's CFTC data showed noncommercials lightly bullish in soybeans with 18,038 net longs as of Aug. 22. Commercials were also net long, holding 17,567 contracts and finding appeal in soybeans' value at these lower prices. Thanks to record plantings, it is still possible that we may get another record soybean harvest this fall, but unlike corn, soybeans are showing enough commercial interest to suggest that support for prices should be near. For now, the trend in soybeans remains down. DTN's National Soybean Index closed at $8.84 Friday, priced 61 cents below the November contract and holding above its lows in June.

Wheat:

December Chicago wheat closed down 7 1/4 cents with front-month contracts in both, Chicago and Kansas City wheat continuing to get hit the hardest -- a bearish sign of poor demand. After this weekend, the extra bearishness is related to concerns that wheat shipments will be disrupted out of Texas. Monday morning, USDA said 24.6 mb of wheat were inspected for export last week, putting total inspections up 12% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials actively bearish in Chicago wheat with 27,600 net shorts as of Aug. 22. Commercials were net long 32,158 contracts, attracted to the value of wheat's cheaper prices. In K.C. wheat, noncommercials still held 48,171 net longs as of Aug. 22 so there continues to be pressure for more liquidation ahead. December K.C. wheat finished down 6 3/4 cents Monday, putting spot prices near their lowest levels in 2017. In spite of this year's lower U.S. production, winter wheat prices continue to trend lower in the face of increased world wheat supplies. DTN's National SRW index closed at $3.81 Friday, priced 28 cents below the September contract and near its lowest price in over three months. DTN's National HRW index closed at $3.39, near its lowest price in over three months.

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

Follow Todd on Twitter @ToddHultman1

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