DTN Closing Grain Comments

Row Crops Jump on Month-End Buying

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

General Comments:

Corn was up 12 3/4 cents in the September contract and up 12 1/4 cents in the December. Soybeans were up 13 1/4 cents in the September contract and up 12 cents in the November. Wheat closed up 4 3/4 cents in the December Chicago contract, up 7 cents in the December Kansas City, and down 15 1/4 cents in the December Minneapolis contract.

The September U.S. dollar index is down 0.14 at 92.68. December gold is up $10.60 at $1,324.70 while December silver is up 12 cents and December copper is up $0.0175. The Dow Jones Industrial Average is up 32 at 21,925. October crude oil is up $1.30 at $47.26. October heating oil is up $0.0858 while October RBOB gasoline is up $0.1351 and October natural gas is up $0.096.

Corn:

December corn closed up 12 1/4 cents Thursday, a curious mix of the market responding to the cheapest cash corn prices in nine months and end-of-month positioning among traders. With Thursday's rebound coming on the one-year anniversary of last year's seasonal low, the buying is a little suspicious, but time will tell if the demand is legitimate and spreads did show evidence of commercial buying. Thursday's weather map was mostly dry across the Midwest as Harvey's rains moved eastward into Arkansas and Mississippi. Temperatures remain mild for late summer and if there is a chance of early freeze, fields north of the Great Lakes are candidates, but that bullish argument for corn remains weak as far as the Midwest is concerned. USDA said last week's export sales and shipments of corn totaled 7.4 and 38.7 million bushels respectively, a neutral combination that keeps total exports up 20% in 2016-17 from a year ago with one week remaining. For 2017-18, corn sales totaled 31.7 million bushels. After a bearish, demoralizing month of trading, Thursday's rebound is possibly marks a seasonal low, but so far, we have to say the trend is still down. DTN's National Corn Index closed at $2.95 Wednesday, priced 50 cents below the December contract and near its lowest price in nine months. In outside markets, October crude oil is up $1.30 after President Trump ordered a half-million barrels of crude to be sent from emergency reserves to the Phillips 66 refinery in Lake Charles, Louisiana, reported CNN.com. September corn had 844 delivery intentions early Thursday.

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Soybeans:

November soybeans closed up 12 cents Thursday, a quick bullish response to this week's lower prices and, as mentioned above, the result of possible end-of-month shuffling among traders. The seven-day forecast remains mostly dry across the Midwest and it was interesting that Thursday's U.S. Drought Monitor mentioned that abnormally dry areas (D0) would likely increase from Illinois to Ohio next week if Harvey's rains don't extend that far north. On the demand side, traders were relieved to see a positive number for old-crop soybean sales and sent September soybeans up x cents. USDA said last week's export sales and shipments of soybeans totaled 4.5 and 25.2 million bushels respectively, a neutral-to-bearish combination, but enough to put total exports up 15% in 2016-17 from a year ago with one more week to go. New-crop soybean sales totaled 57.3 million bushels. August has been a bearish month for all crops, but it should be noted that November soybeans held up better than corn and wheat, thanks to active commercial support in the low $9s. DTN's National Soybean Index closed at $8.72 Wednesday, priced 61 cents below the November contract and holding above its lows in June. Among September contracts, Thursday morning's delivery intentions totaled 1 for soybeans, 200 for soybean meal, and 667 for soybean oil.

Wheat

December Chicago wheat ended up 4 3/4 cents with some buying in sympathy with Thursday's action in corn and beans. December Minneapolis wheat however, did not join the buying frenzy and fell 15 1/4 cents on the day to its lowest close in over two months as conditions remain favorable for the remaining spring wheat harvest. Earlier Thursday, Statistics Canada estimated Canada's all wheat crop at 25.5 mmt, one mmt less than USDA's current estimate. Spring wheat production is expected to total 18.9 mmt, down 8% from a year ago. On the demand side, USDA said last week's export sales and shipments of wheat totaled 19.7 and 26.4 million bushels respectively, a neutral-to-bullish combination for the week. Total wheat exports are off to a good start in 2017-18, up 15% from a year ago, but the pace is likely to slow for a while after this week's Texas hurricane. With December Chicago wheat down 65 cents in August, the trend clearly remains down, but it is also true that prices are getting cheap enough where both, Chicago and K.C. contracts should be finding support. DTN's National SRW index closed at $3.72 Wednesday, priced 52 cents below the December contract and near its lowest price in four months. DTN's National HRW index closed at $3.37, near its lowest price in four months. Among September wheat contracts, delivery intentions totaled 275 for K.C., 1,141 for Minneapolis, and there were none for Chicago early Thursday.

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

Follow Todd on Twitter @ToddHultman1

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Todd Hultman