DTN Closing Grain Comments

General Comments:

Corn was down 1 1/2 cents in the December contract and down 3/4 cent in the July. Soybeans were down 7 3/4 cents in the November contract and down 6 1/2 cents in the July. Wheat closed down 1/4 cent in the December Chicago contract, down 1 3/4 cents in the December Kansas City, and down 2 3/4 cents in the December Minneapolis contract.

The December U.S. dollar index is up 0.33 at 92.77. December gold is down $9.50 at $1,302.00 while December silver is down 23 cents and December copper is down $0.0155. The Dow Jones Industrial Average is up 12 at 22,308. November crude oil is down 0.30 at $51.92. November heating oil is down $0.0107 while November RBOB gasoline is down $0.0168 and November natural gas is up $0.017.

Corn:

December corn ended down 1 1/2 cents Tuesday, finding little reason to stray from the middle of its narrow, sideways range in September. Monday's rain in the western Plains broke up into scattered patches Tuesday, leaving the week open to harvest activity where crops are ready. Late Monday, USDA said 51% of the corn crop was mature, down from its five-year average of 64% for this time of year. Crops in the northern states however, are only 23% to 37% mature, well behind their usual paces. Fortunately for them, there is no significant freeze in the seven-day forecast. Eleven percent of corn was harvested so far. Technically, the decline in December corn from its July 11 peak has come to an abrupt halt, thanks to commercial interest in corn's cheaper prices. Friday's quarterly Grains Stocks report is expected to show a hefty 2.35 billion bushels or so of ending corn stocks for 2016-17, representing 16% of annual use. Technically, the trend in December corn remains down, but prices have not made a new low since August, thanks to increased commercial interest for spot corn prices near their lowest level in eight years. DTN's National Corn Index closed at $3.09 Monday, priced 45 cents below the December contract and still up from its lowest price in eleven months. In outside markets, the December U.S. dollar index is up a second day after Germany's election pressured the euro lower. Most commodities were trading lower.

Soybeans:

November soybeans closed down 7 3/4 cents, lower for a second day with bearish pressure coming from increased rain chances in this week's forecast for central Brazil and a new five-week low in December soybean oil. The drop in soybean oil was related to a notice from EPA that requested a lower biodiesel requirement in 2018 and caught the bean oil market at a time when noncommercials are heavily net long. Now that we are coming up to a new South American planting season, these changing forecasts will gain more attention in the months ahead and add to the mix of interest in the fall U.S. harvest.

Wheat:

December Chicago wheat had a difficult time making up its mind Tuesday, but finally closed down a quarter-cent. Monday's new five-week high in Chicago and Kansas City contracts technically turned the trend higher, but in the bigger picture, it is difficult to imagine winter wheat prices having much upside potential while the USDA is estimating 933 million bushels of U.S. ending wheat stocks. Friday's quarterly Grain Stocks report will show how much U.S. wheat is in storage after one quarter of demand and the average estimate from Dow Jones' survey of analysts is 2.22 bb with a wide range of guesses from 2.08 bb to 2.75 bb. Late Monday, USDA said 24% of winter wheat was planted, a little below the five-year average of 28%. Kansas was 14% planted, below its five-year average of 20% for this time of year. Rain was falling in West Texas on Tuesday with heavier amounts expected later this week, but so far, traders are showing no concern about the rain disrupting planting. Technically, the trend has turned higher for December Chicago wheat, but a sideways trading range is more likely the next several months. DTN's National SRW index closed at $4.11 Monday, priced 43 cents below the December contract and near its highest price in five weeks. DTN's National HRW index closed at $3.76, its highest price in five weeks.

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

Follow Todd Hultman on Twitter @ToddHultman1

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