DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced Mexico bought 10.0 million bushels (253,300 mt) of U.S. corn for 2017-18. Earlier, corn, soybeans, and wheat were quietly lower Wednesday, not showing much reaction to USDA's latest crop assessment and possibly finding some disappointed that freeze fears did not materialize as some Tweeters hoped it would.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced Mexico bought 10.0 million bushels (253,300 mt) of U.S. corn for 2017-18. Before the announcement, December corn was down 1 1/4 cents Wednesday as USDA's Crop Progress reports just aren't showing the price impact they had earlier in the year. USDA said 60% of corn was dented and 12% was considered mature, both down from five-year averages of 68% and 18%, respectively. USDA's lower good-to-excellent rating of 61% took DTN's Corn Condition Index down 5 points to 144, which is still the lowest in four years. Ratings showed slight declines in the Dakotas and Indiana, but as Senior Analyst Darin Newsom quickly reminded, a browning effect is normal this time of year as crops mature. The main concern this late in the season beyond some of the dry areas is the slow development pace, especially in the northern states. Freezing temperatures are not in the seven-day forecast yet, but remain a concern. Last week's low of $3.44 1/4 in December corn remains a candidate for this year's seasonal low, but overall, the trend in December corn is still down and commercial interest at these lower prices has been limited. DTN's National Corn Index closed at $3.12 Tuesday, priced 47 cents below the December contract and up from its lowest price in nine months. There were 215 deliveries for September corn early Wednesday. In outside markets, the September U.S. dollar index is down 0.04, still hovering near its lowest prices in over two years while other commodities are mixed.

Soybeans:

November soybeans were down a half-cent early, holding Tuesday's gain and not showing much effect from USDA's latest crop assessment. USDA said 97% of soybeans had reached pod setting and 11% were dropping leaves, in line with their usual pace. 61% of the crop was rated good-to-excellent, the same as a week ago. Certainly, some areas would have like to have seen more rain lately, but the seven-day forecast has turned dry across the Midwest with Hurricane Irma threating the South Atlantic coast later this week. It will be interesting to see if a diminished bean size keeps this year's crop under last year's total of 4.31 billion bushels, but the better estimate doesn't come until the October WASDE report when prices typically make their seasonal low. Speaking of seasonal influence, it is looking like the low of the year is already behind us in November soybeans as commercials have been active buyers recently and lifted prices from their August lows. That speaks well for soybean demand and gives prices a chance for an early start to the more bullish demand season. DTN's National Soybean Index closed at $9.04 Tuesday, priced 65 cents below the November contract and holding above its lows in June. Among September contracts, Wednesday morning's delivery intentions totaled 73 for soybeans, 169 for soybean meal, and 446 for soybean oil.

Wheat:

December Chicago wheat was down 1 1/2 cents early, still trying to maintain Tuesday's small gain as wheat prices approach the end of this year's season in the Northern Hemisphere. USDA said late Tuesday that 89% of spring wheat was harvested, ahead of its usual pace. Meanwhile, the northwestern U.S. contends with smoke from wildfires and has little chance for rain in the seven-day forecast. In a few short days, Chicago wheat has seen constructive changes which have changed the outlook from bearish to neutral and the August low of $4.22 1/2 in the December contract is likely to mark support for the rest of 2017. Along with the increase of commercial net longs in Friday's CFTC report, aggressive buying in the September contract has brought spread differences to more normal levels of carry. None of that suggests significantly higher prices anytime soon, but the two-month decline is likely over as prices are finding support. DTN's National SRW index closed at $3.98 Tuesday, priced 45 cents below the December contract and up from its lowest prices in four months. Among September wheat contracts, delivery intentions totaled 143 for Chicago and 159 for K.C. early Wednesday.

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

FollowTodd on Twitter @ToddHultman1

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