DTN Before The Bell Grain Comments

Grains Off to Quiet Start, U.S. Dollar Falls

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

Grains were trading quietly early Thursday with one more day before USDA's weekly report of export sales is released. The September U.S. dollar index is trading at its lowest spot prices in over two years after real GDP in the Eurozone was reported up 2.3% in the second quarter from a year ago.

Other Markets:

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

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Corn:

December corn was down a penny early Thursday with cool, but not freezing temperatures prevailing across the Corn Belt. The seven-day forecast remains mostly dry for the U.S., except for the threatening approach of Hurricane Irma to the South Atlantic coast. USDA's final weekly report of export sales for 2016-17 will be released early Friday due to this week's holiday and is on track for a slight increase in corn's export estimate. The bigger uncertainty of course, is the size of the upcoming crop and so far, 13.8 to 13.9 billion bushels seems like a good guess. Technically, the trend in December corn remains down and there has not been much evidence of commercial interest. However, the exit of noncommercials is constructive for prices and makes last week's low a candidate for being this year's seasonal low. DTN's National Corn Index closed at $3.15 Wednesday, priced 46 cents below the December contract and up from its lowest price in nine months. There were 195 deliveries for September corn early Thursday. In outside markets, the September U.S. dollar index is down 0.82 after Eurostat reported real GDP in the Eurozone up 2.3% in the second quarter from a year ago, a sign of improving growth in Europe.

Soybeans:

November soybeans were up 3 3/4 cents early, attempting to push higher for a fifth consecutive day with crops maturing in the field while mostly dry conditions and moderate temperatures prevail across the Midwest. Friday morning's weekly report of export sales will be interesting as the final one of 2016-17 and carries a chance that it may result in a modest reduction of old-crop ending soybean stocks. It is impressive that soybean prices are able to rally 40 cents at a time when traders are typically focused on the upcoming harvest, but that plus the tracks of commercial interest in the long side of soybeans are more reminders of how active the demand side of the market has been. The trend has turned higher and we still have a lot to learn about the harvest that is approaching. DTN's National Soybean Index closed at $9.07 Wednesday, priced 64 cents below the November contract and holding above its lows in June. Among September contracts, Thursday morning's September delivery intentions totaled 145 for soybeans, 180 for soybean meal, and 432 for soybean oil.

Wheat:

December Chicago wheat was down a quarter-cent, a quiet start to what is likely to be another quiet day of trading. Smoke and wildfires remain a problem in the northwestern U.S., but does not seem to be a significant problem in the way of the final laps of spring wheat harvest. Except for some dry conditions in central Kansas, the southwestern Plains look in fairly good shape for winter wheat planting season. Cash HRW wheat prices are higher than they were a year ago, but with USDA's estimate of world ending wheat stocks at a record high, it does not seem likely that there will be any enthusiasm for increased wheat acres. The lack of optimism about wheat prices is actually healthy for the market and should help winter wheat prices find support nearby, in the low $4s. The low of $3.94 1/2 left on last week's outside weekly reversal is a good mark for support for the rest of 2017. DTN's National SRW index closed at $4.00 Wednesday, priced 45 cents below the December contract and up from its lowest prices in four months. Among September wheat contracts, delivery intentions totaled 18 for Chicago, 204 for K.C., and 13 for Minneapolis early Thursday.

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

FollowTodd on Twitter @ToddHultman1

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Todd Hultman