DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced China bought 9.7 million bushels (264,000 mt) of U.S. soybeans and 7.1 million bushels (179,324 mt) of U.S. corn were sold to unknown destinations, both for 2017-18. Earlier, December corn and November soybeans were slightly higher, showing a more cautious approach to Tuesday's WASDE report.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 7.1 million bushels (179,324 mt) of U.S. corn were sold to unknown destinations,for delivery in 2017-18. December corn was up a half-cent with temperatures that are cool, but safely above freezing across the Corn Belt and a seven-day forecast that is mostly dry. As most know by now, the big threat this weekend is Hurricane Irma, headed toward Florida as a category four hurricane. Early Friday, USDA final export sales for 2016-17 said corn sales and shipments totaled -14.1 and +27.4 million bushels respectively, a combination that put total corn shipments 44 million bushels short of USDA's export estimate for 2016-17. New-crop corn sales totaled 58.3 million bushels for the week, making the whole report neutral-to-bullish. Technically, the trend in December corn remains down, but after a demoralizing performance in August, noncommercial traders largely abandoned their net longs and there is a chance that last week's low of $3.44 1/4 may be this year's seasonal low. The other side of that view is that so far, commercials are not showing much interest in the long side of corn. DTN's National Corn Index closed at $3.10 Thursday, priced 45 cents below the December contract and up from its lowest price in nine months. There were 67 deliveries of September corn early Friday. In outside markets, the September U.S. dollar index is down 0.59, reflecting concerns about the impacts of two major hurricanes on the U.S. economy.

Soybeans:

At 8 a.m. CDT, USDA announced China bought 9.7 million bushels (264,000 mt) of U.S. soybeans for 2017-18. Before the announcement, November soybeans were up 1 3/4 cents, still near its highest prices since USDA's August WASDE report and less than a week away from the September WASDE report, due out Tuesday. Friday's weather map and the seven-day forecast remains mostly dry across the Midwest, taking away the last hopes for another late shot of rain as crops mature in the field. Early Friday, USDA said export sales and shipments of soybeans totaled -13.5 and 26.3 million bushels, respectively in the final week of 2016-17, a neutral finish that saw total shipments fall 15 million bushels shy of USDA's export estimate for 2016-17. New-crop soybean sales totaled 56.0 million bushels on the week. Contrary to its usual bearish seasonal tendency for this time of year, November soybeans have turned higher with active commercial support holding up prices and reflecting aggressive demand in the low to mid $9s. And all of this is happening at a time when traders are expecting a large, 4.3 billion bushel soybean crop, soon to be commented on by USDA. DTN's National Soybean Index closed at $9.04 Thursday, priced 64 cents below the November contract and holding above its lows in June. Among September contracts, delivery intentions totaled 29 for soybeans, 71 for soybean meal, and 434 for soybean oil early Friday.

Wheat:

December Chicago wheat was down 1 1/2 cents, transitioning to a quieter time of year for wheat prices. While all eyes are on the approach of Hurricane Irma in the southeast, the northwestern U.S. continues to deal with smoke and wildfires while the final laps of spring wheat harvest are being made. USDA said last week's export sales and shipments of wheat totaled 13.8 and 8.3 million bushels respectively, smaller amounts impacted by Hurricane Harvey. With its first quarter of the year in the books, total wheat shipments are up 7% in 2017-18 from a year ago, well above USDA's estimated pace. As the year progresses, sales are expected to become more difficult, competing with increased production from Russia and Europe. Like corn, winter wheat prices suffered demoralizing declines in August, but unlike corn, noncommercials in Chicago wheat turned short while commercials took advantage of wheat's cheaper prices and increased net longs. Chicago wheat now seems at a cheap enough level to at least support a sideways trading range for the rest of 2017, but it is difficult to find a bullish argument. DTN's National SRW index closed at $3.92 Thursday, priced 45 cents below the December contract and up from its lowest prices in four months. Among September wheat contracts, delivery intentions totaled 100 for Chicago, 5 for Minneapolis, and none for K.C. early Friday.

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

FollowTodd on Twitter @ToddHultman1

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