DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced 5 million bushels (136,000 mt) of U.S. soybeans were sold to China for 2017-18. 5.7 million bushels (143,650 mt) of U.S. corn were sold to Mexico for 2017-18. Grains were starting higher Tuesday with early evidence of commercial buying in soybeans, meal, bean oil, and Chicago wheat.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 5.7 million bushels (143,650 mt) of U.S. corn were sold to Mexico for 2017-18. Earlier, December corn was up 3 1/4 cents Tuesday, starting the week on a higher note after Friday's CFTC data showed noncommercials turned roughly neutral on corn, cutting back net longs from 70,508 to 2,376 as of Aug. 29. The washout of noncommercials puts corn prices in a less vulnerable position now ahead of harvest and increases the chances that last week's low may be able to hold through harvest time. Monday's weather map is mostly clear across the Midwest as far as clouds are concerned, but saw smoke haze over the weekend as a result of fires in the northwestern U.S. The seven-day forecast is mostly dry for the Midwest with cooler, but not freezing temperatures. Technically, the trend for December corn remains down, but it will be interesting to see if last week's low can hold as we get closer to harvest. DTN's National Corn Index closed at $3.08 Friday, priced 47 cents below the December contract and up from its lowest price in nine months. There were 724 deliveries for September corn early Monday. In outside markets, the September U.S. dollar index is down 0.33 and December gold is up $6.30 after North Korea provoked its neighbors again with a nuclear test on Sunday.

Soybeans:

At 8 a.m. CDT, USDA announced 5 million bushels (136,000 mt) of U.S. soybeans were sold to China for 2017-18. Before the announcement, November soybeans were up 9 3/4 cents, emerging from their August lows with help from commercial buying in soybean meal and bean oil. The seven-day forecast is mostly dry across the Midwest as crops mature in the field. Growing weather has thrown this year's crops several curves, but a record harvest is still possible, related to the record planting of 89.5 million acres. Soybeans' latest gains have come as a result of increased commercial interest, something that Friday's Commitments of Traders report showed again. CFTC data showed noncommercials turned lightly bearish in soybeans, holding 14,707 net shorts as of Aug. 29. Commercials on the other hand, increased net longs to 49,981 contracts, the most since early July and a bullish sign that soybean demand is doing well. In spite of a big crop on the way and being in a time of year that is typically bearish for prices, November soybeans are trading at their highest prices in three weeks. DTN's National Soybean Index closed at $8.86 Friday, priced 64 cents below the November contract and holding above its lows in June. Among September contracts, Tuesday morning's delivery intentions totaled 196 for soybean meal and 451 for soybean oil.

Wheat:

December Chicago wheat was up 7 3/4 cents early, supported by aggressive commercial buying in the September contract as it goes through the delivery period. Chicago wheat has had a quick about-face and left behind a bullish outside reversal Friday on its weekly chart. The new aggressive interest of commercials in the September contract started Thursday and represents a bullish change in attitude after showing very little interest throughout August. Friday's CFTC data showed noncommercials still bearish in Chicago wheat with 33,233 net shorts as of Aug. 29. Commercials increased net longs to 36,210, the most since mid-June. So once again, we see an example of commercials responding to wheat's cheap prices and it would not be surprising to see the August low stand for the rest of 2017. Monday afternoon's Crop Progress report will show spring wheat harvest progress in northwestern states dealing with wildfires. DTN's National SRW index closed at $3.93 Friday, priced 46 cents below the December contract and up from its lowest prices in four months. Among September wheat contracts, delivery intentions totaled 196 for K.C. early Tuesday and there have been none yet for Chicago wheat.

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

FollowTodd on Twitter @ToddHultman1

(BAS)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.