DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced 6.3 million bushels (160,020 metric tons) of U.S. corn was sold to Mexico for 2017-18. Grains were off to a quiet start Monday with November soybeans a little higher while corn and wheat were a little lower. Public attention remains on southeastern Texas in the aftermath of Hurricane Harvey with more rain expected in the area this week.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 6.3 million bushels (160,020 mt) of U.S. corn was sold to Mexico for 2017-18. Before the announcement, December corn was down 3/4 cent, a quiet start to the week as attention turns to the flooding events of the weekend in southeastern Texas. More heavy rain amounts are forecast for eastern Texas and Louisiana the next several days and some disruption of barge traffic seems likely this week, but it should not be a major problem as far as grain trade is concerned. Here in the Midwest, light, scattered showers fell over the weekend, but the seven-day forecast is mostly dry with the bulk of this week's rain falling around the Mississippi Delta and southeastern U.S. 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 slow source of liquidation in the market. With a big harvest ahead, December corn continues to trend lower with no sign of commercial buyers responding to low prices yet. DTN's National Corn Index closed at $3.02 Friday, priced 37 cents below the September contract and near its 2017 low. In outside markets, December cotton is up 1.11 cents after Hurricane Harvey produced massive flooding in southeastern Texas over the weekend. The September U.S. dollar index is down 0.32 at a new contract low.

Soybeans:

November soybeans were up 2 3/4 cents, also off to a quiet start as all eyes were on Hurricane Harvey over the weekend. There is not much rain in store for the Midwest this week, except for the light amounts over the eastern Midwest on Monday morning and the heavier amounts over the Mississippi Delta that may reach into the Ohio River Valley later this week. Friday's CFTC data showed noncommercials lightly bullish in soybeans with 18,038 net longs as of Aug. 22. Commercials were net long 17,567 contracts, finding appeal in soybeans' value at these lower prices. The appearance of commercial interest doesn't mean prices can't go lower, especially when we may still see a record harvest this fall, but it is another encouraging sign of how active demand for soybeans is helping to support soybean prices. With harvest still ahead, November soybeans remain under bearish pressure, but are doing well to hold above the June low of $9.07. 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 was down 2 3/4 cents early Monday, once again having a difficult time finding support, even as spot prices are near their lowest levels in 2017. Monday afternoon's Crop Progress report is likely to show spring wheat harvest past the three-quarters mark and the seven-day forecast remains favorably dry across the northwestern U.S. again this week. 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. In spite of this year's lower production in the U.S. and Canada, winter wheat prices remain under bearish pressure, looking for a new range where prices can trade through the winter. DTN's National SRW index closed at $3.81 Friday, priced 28 cents below the September contract and near its lowest price in three months.

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

FollowTodd on Twitter @ToddHultman1

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