DTN Closing Grain Comments

General Comments:

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

The September U.S. dollar index is up 0.67 at 92.85. December gold is down $6.40 at $1,312.50 while December silver is down 4 cents and December copper is down $0.0150. The Dow Jones Industrial Average is up 36 at 21,901. October crude oil is down $0.48 at $45.96. October heating oil is up $0.0014 while October RBOB gasoline is up $0.0326 and October natural gas is down $0.046.

Corn:

December corn closed down 3 1/4 cents Wednesday, its eleventh new low for 2017 in the month of August. Wednesday saw dry weather across most of the Midwest with a continuation of moderate temperatures. The seven-day forecast is mostly dry for the Midwest with moderate to heavy rains in the aftermath of Hurricane Harvey expected to move east and stay south of the Ohio River. Temperatures will turn hotter in the southwestern Plains over the weekend, but remain mild for most of the Corn Belt. On the demand side, the U.S. Energy Department said last week's ethanol production slipped from 1.052 to 1.042 million barrels per day while inventory also came down, from 21.5 to 21.3 million barrels. The production pace remains high and supportive for corn prices, but not enough to stop the selling in August. As has been widely discussed, crop conditions cover a wide range of variability this year, which adds uncertainty to the guessing process. While we wait for corn to mature, we have to notice that commercials have shown no sign of concern about obtaining supplies in the months ahead and without their support, DTN's national index of cash corn prices has fallen back below $3.00 for the first time since November 2016. For now, December corn continues to trend lower and we continue to watch for signs of a seasonal low, which typically comes around in early October. DTN's National Corn Index closed at $2.98 Tuesday, priced 36 cents below the September contract and near its lowest price in nine months. In outside markets, the September U.S. dollar index is up 0.67, rebounding from Tuesday's test of its two-year low after the Commerce Department said real GDP was up 2.2% in the second quarter from a year ago, more than was expected, reported RTTNews.com.

Soybeans:

November soybeans closed down 4 cents Wednesday, continuing to trade in the low $9s with the possibility of another record soybean harvest on the way this fall. Illinois and Indiana could use more rain, but won't get it this week unless the path of Harvey's rains track farther north than is currently expected. While weather conditions have been more adverse in 2017, August rains in the western Plains and across parts of Iowa came at a beneficial time for this year's soybean crop, keeping the possibility open that soybeans could still produce another record harvest of 4.31 billion bushels or more. The difference for soybeans as opposed to corn is that soybeans have had better export demand through the summer and even now, FOB soybean prices are 6 cents a bushel cheaper at the U.S. Gulf than at Brazil's ports. Earlier Wednesday, USDA said 4.8 million bushels (131,000 metric tons) of soybeans were sold to China for 2017-18. With two weekly export sales reports left in 2016-17, traders will be on guard Thursday for more old-crop cancellations and Wednesday's 7 3/4-cent drop in September soybeans reflects that concern. November soybeans remains under bearish pressure, but continue to hold above the June low at $9.07 with signs of commercial support in the low $9s. DTN's National Soybean Index closed at $8.77 Tuesday, priced 60 cents below the November contract and holding above its lows in June.

Wheat:

December Chicago wheat ended unchanged after an early attempt of bargain-hunting once again lost steam by midmorning. As far as wheat news goes, this is the start of a quieter time of year for U.S. wheat prices as the final fourth of the U.S. spring wheat crop is harvested and Canada is also said to be making good progress. It is no surprise by now that North American wheat production is down this year, but winter wheat prices aren't showing much benefit with cash SRW and HRW wheat prices back down to their lowest levels since April. Futures spreads in both, Chicago and K.C. contracts reflect poor demand from the commercial sector and that is a tough bearish hurdle to get past. This week's flooding from Hurricane Harvey is also making exporting wheat more difficult and rail service in southeastern Texas has been suspended (see Wednesday's DTN article, "Harvey Responsible for Rail Embargoes..." by DTN Basis Analyst Mary Kennedy). Seasonally, this is typically a bearish time of year for winter wheat and USDA's estimate of record high world ending wheat stocks makes it even more likely that wheat prices will remain depressed in late 2017. DTN's National SRW index closed at $3.76 Tuesday, priced 27 cents below the September contract and near its lowest price in four months. DTN's National HRW index closed at $3.33, near its lowest price in four months.

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

Follow Todd on Twitter @ToddHultman1

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