DTN Closing Grain Comments

Soybeans Bounce Back, Grains Roughly Steady

Todd Hultman
By  Todd Hultman , DTN Grains Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 1 1/2 cents in the September contract and unchanged in the December. Soybeans were up 8 3/4 cents in the September contract and up 10 cents in the November. Wheat closed up 1 1/4 cents in the December Chicago contract, up 2 1/2 cents in the December Kansas City and up 1 3/4 cents in the December Minneapolis contract.

The September U.S. dollar index is up 0.57 at 92.43. December gold is down $4.50 at $1,328.20 while December silver is down 4 cents and December copper is down $0.0525. The Dow Jones Industrial Average is up 19 at 22,137. October crude oil is up $1.05 at $49.28. October heating oil is up $0.0292 while October RBOB gasoline is down $0.0083 and October natural gas is up $0.067.

Corn:

December corn tried to trade higher Wednesday but ended unchanged, one day after USDA estimated the 2017 U.S. corn crop at a higher-than-expected 14.2 billion bushels, based on a yield of 169.9 bushels an acre. USDA's latest guess is not the final say on the matter, but it did spark heavy selling volume Tuesday, taking prices down 12 cents at one point. The fact that December corn did not stay down 12 cents and is still holding above its August low of $3.44 1/4 gives some hope that commercials may be finding corn more attractive at these lower prices. Wednesday morning, the U.S. Energy Department said ethanol production dropped last week from 1.060 to 1.047 million barrels a day while ethanol inventory was unchanged at 21.1 million barrels. That is still a high level of production to help support corn prices but is not making a dent in the surplus of corn. In related news, several news sources, including CNBC.com, reported China plans to produce and mix 10% ethanol into its national gasoline supply by 2020 -- a potentially bullish change for world corn demand. In the meantime, December corn remains in a downtrend, but shows signs of possibly being close to support. DTN's National Corn Index closed at $3.07 Tuesday, priced 45 cents below the December contract and up from its lowest price in nine months. There were 375 deliveries of September corn early Wednesday. In outside markets, the September U.S. dollar index is up 0.57 after the U.S. Labor Department said producer prices were up 2.4% in August from a year ago.

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Soybeans:

November soybeans closed up a dime Wednesday, erasing Tuesday's WASDE-related loss as commercials responded to lower soybean prices by buying both soybeans and meal. It also helped that USDA announced its fourth soybean export sale in four sessions, reporting 6.15 million bushels (167,370 metric tons) of U.S. soybeans bought by Mexico for 2017-18. Indiana saw light scattered showers Wednesday, but most of the Midwest has been dry with the five-day forecast now showing chances for moderate amounts across the Northern and central Plains. Crop weather has not been as friendly in 2017 as previous years, and time will tell if USDA's record estimate of 4.43 billion bushels of soybeans will stand. The more important factor is commercial attitudes toward soybeans and market clues suggest that they remain active buyers at these current levels. So far, the trend in soybeans remains up. DTN's National Soybean Index closed at $8.85 Tuesday, priced 66 cents below the November contract and down from its highest prices in four weeks. Among September contracts, delivery intentions totaled 118 for soybean meal, 340 for soybean oil, and none for soybeans early Wednesday. Trading in September grain futures is dangerously thin and contracts officially expire early on Thursday, Sept. 14.

Wheat:

December Chicago wheat closed up 1 1/4 cents, settling on a small gain after reaching its highest price in nearly four weeks earlier Wednesday. Winter wheat survived Tuesday's WASDE report with USDA's estimate of U.S. ending wheat stocks, staying at 933 mb and the estimate of world wheat stocks trimmed to 263.14 million metric tons. That is still excessively bearish for prices as world ending stocks represent 36% of annual use, the most in 18 years. As far as wheat prices are concerned, however, Tuesday's news is old news, and even though winter wheat prices remain in a downtrend, they are showing signs of leveling out. In Chicago wheat, it also helps prices that commercials are net long. Futures spreads however, show no signs of aggressive bidding, so a sideways range seems in the cards for winter wheat as we work toward the end of 2017. DTN's National SRW index closed at $3.97 Tuesday, priced 45 cents below the December contract and up from its lowest price in four months. DTN's National HRW index closed at $3.60, up from its lowest price in four months. Among September wheat contracts, delivery intentions totaled 18 for Chicago, 35 for K.C., and 1 for Minneapolis early Wednesday.

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

Follow Todd on Twitter @ToddHultman1

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Todd Hultman