DTN Closing Grain Comments

General Comments:

Corn was up 4 1/4 cents in the September contract and up 3 1/4 cents in the December. Soybeans were up 18 1/2 cents in the September contract and up 19 cents in the November. Wheat closed up 4 1/4 cents in the December Chicago contract, up 6 1/4 cents in the December Kansas City, and down 2 3/4 cents in the December Minneapolis contract. The September U.S. dollar index is down 0.43 at 92.33. December gold is up $13.60 at $1,344.00, while December silver is up 14 cents and December copper is up $0.0110. The Dow Jones Industrial Average is down 22 at 21,758. October crude oil is up $1.38 at $48.67. October heating oil is up $0.0042 while October RBOB gasoline is down $0.0476 and October natural gas is down $0.091.

Corn:

December corn closed up 3 1/4 cents Tuesday, finding it a little easier to trade higher now that noncommercials have dumped most of their net longs. 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. Corn prices were also helped slightly by Tuesday's final inspections report of 2016-17, which showed 2.24 billion bushels of total inspections, up 22% from a year ago and above USDA's estimated pace for a 17% gain in corn exports. New-crop corn export sales remain slow so far in 2017-18, but USDA did say 5.7 million bushels (143,650 metric tons) of U.S. corn were sold to Mexico for 2017-18. The seven-day forecast is looking for mostly dry weather across the Corn Belt this week with cooler, but not freezing, temperatures. Thursday's rebound in prices may have marked this fall's seasonal low, but it is difficult to say yet with harvest still approaching while crop estimates have been unsatisfactory to date. Technically, December corn remains in a downtrend, but last week's abrupt U-turn is a possible candidate for this fall's seasonal low. 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 Tuesday. In outside markets, the September U.S. dollar index is down 0.43 and December gold is up $13.60 after North Korea provoked its neighbors again with a nuclear test on Sunday.

Soybeans:

November soybeans closed up 19 cents Tuesday, lifted by signs of more aggressive commercial buying in Friday's Commitments of Traders report. 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. Commercials were also slightly net long in meal and were involved in Tuesday's buying that sent December prices up $9.20 to their highest close in three weeks. Tuesday morning, USDA said last week's 23.7 million bushels of inspections put the total for 2016-17 up 12% from the previous year and slightly above USDA's estimated pace for an 11% gain. USDA also added that 5 million bushels (136,000 mt) of U.S. new-crop soybeans were sold to China. Tuesday's turn higher in November soybeans leaves behind a higher low in August and comes at a time when prices are usually depressed with the anticipation of harvest -- especially when the harvest could be a new record crop. Increased global demand continues to sustain soybean prices at profitable levels and remains soybeans' best bullish argument. 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 ended up 4 1/4 cents, also showing more interest from commercials after a demoralizing two months of trading in July and August. Friday's CFTC data showed noncommercials still bearish in Chicago wheat with 33,233 net shorts as of Aug. 29. Commercials, on the other hand, took advantage of wheat's lower prices and increased net longs to 36,210, the most since mid-June. It is also noteworthy that September wheat, which is currently in delivery, was up 10 cents Tuesday as commercials took advantage of the excessive discounts that front-month contracts offered through most of August. Tuesday morning, USDA said 9.3 million bushels of wheat were inspected for export last week, a smaller-than-usual amount with Hurricane Harvey getting in the way. Total inspections are still up 6% on the year, though, and well above USDA's estimate for an 8% drop in exports. Tuesday's Crop Progress report will have an estimate of spring wheat harvest progress, which should be closer to the finish line if they can get past the wildfires in the northwestern U.S. Technically, the trend in Chicago wheat prices remains down, but Friday's bullish outside weekly reversal is a good candidate for marking support for the rest of 2017. DTN's National SRW index closed at $3.93 Friday, priced 46 cents below the December contract and up from its lowest price in four months. DTN's National HRW index closed at $3.51, up from its lowest price 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

Follow Todd on Twitter @ToddHultman1

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