DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced 4.85 million bushels (132,000 mt) of U.S. soybeans and 9.2 million bushels (233,800 mt) of U.S. corn were both sold to unknown destinations for 2017-18. Corn, soybeans, and wheat were all modestly lower early Thursday with rain in Brazil and two USDA reports due out on Friday.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 9.2 million bushels (233,800 mt) of U.S. corn were sold to unknown destinations for 2017-18. Earlier, December corn was down 1 1/2 cents, staying quietly sideways in September with USDA's report of Sep. 1 corn stocks due out Friday morning. Dow Jones' pre-report survey is expecting corn stocks to stay near the September WASDE estimate of 2.35 billion bushels. If true, it will be the largest pile of surplus corn in 30 years (see Thursday's report preview by Senior Analyst Darin Newsom, "Big Numbers Could Be Really Big"). Fortunately for producers, corn demand has improved in 30 years, but the estimated ending stocks-to-use ratio of 16% is still expected to be the most in 12 years. With this year's harvest expected around 14 billion bushels, there is going be a lot of corn available this fall and prices are likely to remain under pressure. Early Thursday, USDA said last week's sales and shipments of corn totaled 12.6 and 28.6 million bushels respectively, a bearish combination for the week which puts total corn shipments down 47% in 2017-18 from a year ago. Technically, corn remains in a downtrend, but has held sideways in September, above the August low of $3.44 1/4. DTN's National Corn Index closed at $3.09 Wednesday, 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 down 0.04 after the U.S. Commerce Department said real GDP was up 2.2% in the second quarter from a year ago, slightly more than expected reported RTTNews.com.

Soybeans:

At 8 a.m. CDT, USDA announced 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to unknown destinations for 2017-18. Before the announcement, November soybeans were down a nickel Thursday as rain in the forecast for central Brazil continues to give the southern planting season a better start than the dry weather it was facing last week. Here in the U.S., rain is falling in the southwestern Plains while the Midwest is mostly dry and has a green light for soybean harvest. The next five days show chances for rain from eastern Nebraska to southern Minnesota while the rest of the Midwest stays mostly dry. Early Thursday, USDA said last week's sales and shipments of soybeans totaled 109.6 and 36.2 million bushels respectively, bullish amounts which have total soybean shipments up 28% in 2017-18 from a year ago. Dow Jones' pre-report survey is expecting Friday's report of Sep. 1 U.S. soybean stocks to come in at 339 million bushels, but exports have been active enough that traders will be watching for a possible surprise. In spite of this week's lower prices, the trend remains up in soybeans with resistance at $9.90 and commercials supporting prices in the low to mid $9s. DTN's National Soybean Index closed at $8.90 Wednesday, priced 76 cents below the November contract and down from its highest price in seven weeks.

Wheat:

December Chicago wheat was down 2 1/4 cents early, pausing after reaching a new six-week high on Wednesday. Thursday's weather map shows rain in eastern Colorado, Oklahoma, and Texas, which should be beneficial for the new winter wheat crop that is being planted. On Friday, USDA will update its estimate of 2017 wheat production and Dow Jones' survey expects an all wheat total of 1.725 billion bushels. Winter wheat production is expected around 1.29 billion bushels and other spring wheat at 389 million bushels. The estimates are a little lower than what USDA said in the September WASDE report, but are not different enough to have much price impact. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 16.0 and 15.6 million bushels respectively, a bearish combination for the week. Total wheat shipments in 2017-18 are down 3% from a year ago. Technically, the trend in Chicago wheat has turned up, but fundamentally, it is difficult to see much potential for higher wheat prices which are more apt to find a sideways range at these levels for the next few months. DTN's National SRW index closed at $4.18 Wednesday, priced 44 cents below the December contract and at its highest close in six weeks.

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

FollowTodd on Twitter @ToddHultman1

(BAS)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.