DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn, soybeans, and wheat were all higher early, continuing Thursday's more bullish tone while row crops mature in the field. The September U.S. dollar index is modestly lower after the Labor Department reported a lower-than-expected increase of non-farm payrolls in August.

Other Markets:

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

Corn:

December corn was up 2 1/2 cents early Friday, quietly holding Thursday's gain with Friday's weather map showing rain around Kentucky and southern Indiana and light showers in the northwestern Plains, but is mostly dry elsewhere. Friday's new seven-day forecast looks much drier with the best rain chances seen in the eastern third of the U.S. Temperatures remain mild and there is no expectation of early freeze in the Midwest the next five days. Thursday's rebound in prices may have marked this year's seasonal low as happened on Aug. 31 a year ago, but it is a difficult call to make. The seasonal low typically comes around early October and, while it helps prices that this year's harvest will be lower than a year ago, export demand is slower with South America currently winning the business. Technically, the trend in corn remains down, but the washout selling at the end of August may have set a low. DTN's National Corn Index closed at $3.08 Thursday, priced 50 cents below the December contract and up from its lowest price in nine months. In outside markets, the September U.S. dollar index is down 0.15, trading actively after the U.S. Labor Department said non-farm payrolls were up 156,000 in August, less than expected. The U.S. unemployment rate increased from 4.3% to 4.4% in August, more than expected.

Soybeans:

November soybeans were up 5 1/2 cents early, an early effort to maintain Thursday's bullish tone, helped by this week's rains staying away from Illinois and most of Indiana. News that an index of manufacturing in China increased in August may also be helping early soybean prices. This year's soybean crop has endured a wide range of challenges and has also received late-season help from rains in parts of the western and central Midwest, but pockets of distressed crops remain. Because of record plantings this spring, there is still a chance for a record fall harvest of 4.31 billion bushels or more and that continues to put bearish pressure on prices. Unlike corn and wheat however, soybean demand has been more active and has encouraged commercials to be more aggressive bidders of prices in the low $9s. The result is that even though the trend in November soybeans remains down, prices continue to hold a range, trading above their June low of $9.07. DTN's National Soybean Index closed at $8.83 Thursday, priced 63 cents below the November contract and holding above its lows in June. Among September contracts, Friday morning's delivery intentions totaled 1 for soybeans, 200 for soybean meal, and 461 for soybean oil.

Wheat:

December Chicago wheat was up 5 1/2 cents early, benefiting from early commercial buying. After nearly two months of falling wheat prices took DTN's national index of cash SRW wheat prices to its lowest level in four months, commercials finally are starting to show some support, but that doesn't necessarily mean prices have much potential to trade higher. This year's lower North American wheat production will help lower U.S. ending wheat stocks, but supplies around the rest of the world are still high, thanks to increased production in Russia and Europe. The seven-day forecast continues to look dry for the northwestern U.S., favorable for the final laps of spring wheat harvest, but also contending with fire warnings after a long, dry summer. Technically, the trend is still down in winter wheat, but prices are likely to find a sideways trading range in this area for the rest of 2017. DTN's National SRW index closed at $3.86 Thursday, priced 48 cents below the December contract and up from its lowest prices in four months. Among September wheat contracts, delivery intentions totaled 275 for K.C., 114 for Minneapolis, and there were none for Chicago early Friday.

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

FollowTodd on Twitter @ToddHultman1

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