DTN Closing Grain Comments

General Comments:

Corn closed up 2 3/4 cents in the December contract and up 2 1/2 cents in the July. Soybeans closed up 8 3/4 cents in the November and up 7 1/4 cents in the July. Wheat closed down 6 3/4 cents in the December Chicago, down 10 1/4 cents in the December Kansas City, and down 21 1/4 cents in the December Minneapolis.

The December U.S. dollar index is up 0.05 at 92.98. December gold is down $2.90 at $1,285.80 while December silver is down $0.11 and December copper is down 0.0265. The Dow Jones Industrial Average is down 18 at 22,363. November crude oil is down $0.12 at $51.44. November heating oil is down $0.204, November RBOB gasoline is down $0.0268, and November natural gas is up $0.007.

For the week:

December corn closed up 1 3/4 cents and July closed up 2 1/4 cents. November soybeans were down 16 cents while the July was down 15 1/4 cents. December Chicago wheat was down 1 1/4 cents, December Kansas City wheat was down 7 1/2 cents, and December Minneapolis wheat was down 11 cents.

Corn:

December corn closed up 2 3/4 cents Friday and was up 1 3/4 cents on the week after USDA found 2.295 billion bushels of corn on hand as of Sept. 1, the final day of 2016-17. That was a little less than expected, but still the largest surplus in 30 years, reminding traders that we are soon going to be seeing a lot of new corn piles springing up around the country when the new harvest comes in, estimated by USDA at 14.2 bb. Add to that a slow export pace, low water levels on the Lower Mississippi River, and a bearish level of carry in the December/March futures spread, and it is fair to wonder if corn has reached its low point for the season yet or not. USDA's next WASDE report is due out Oct. 12 and Friday's lower corn stocks will contribute a 55 million bushel reduction in the new-crop ending stocks estimate to be included with other influences. Technically, corn remains in a downtrend, but has held above the August low of $3.44 1/4 with slight help from commercials turning lightly net long. DTN's National Corn Index closed at $3.08 Thursday, priced 45 cents below the December contract and holding above its lowest price in 11 months. In outside markets, the December U.S. dollar index is up 0.05, but staying below its five-week high. Most other commodities were mixed with December gold down $2.90.

Soybeans:

November soybeans closed up 8 3/4 cents Friday, but was down 16 cents on the week as recent forecasts continue to point toward more beneficial rains in store for southern and central Brazil. USDA put a period on the end of the 2016-17 season Friday, saying that U.S. soybean stocks totaled 301 mb on Sept. 1, less than was expected. It is still the largest ending stocks total in 10 years, but represents just 7% of annual use. It is also the 22nd time in 27 years that ending U.S. soybean stocks turned out to be lower than USDA's original May WASDE estimate -- albeit not by much in 2016-17. The market's bigger concern at the moment is this fall's harvest, which USDA is estimating at a record high 4.43 bb. Unlike corn, soybean demand has been active enough this year to keep soybean prices better supported and that should continue as FOB soybean prices are 22 cents cheaper at the Gulf, compared to Brazil's ports. Technically, the trend in November soybeans remains up, but may be stuck between resistance at $9.90 and commercial support in the low $9s. DTN's National Soybean Index closed at $8.83 Thursday, priced 76 cents below the November contract and down from its highest price in seven weeks.

Wheat:

December Chicago wheat closed down 6 3/4 cents, but ended down 1 1/4 cents on the week as the month of September found a better response of demand for wheat in the low to mid $4s. On Friday, USDA said U.S. wheat stocks totaled 2.253 bb as of Sept. 1, a little more than was expected after the first quarter of 2017-18. USDA also estimated all wheat production at 1.741 bb, winter wheat production at 1.269 bb, other spring wheat production at 416 mb and durum production at 55 mb. Overall, USDA's production estimates were neutral for winter wheat, but a bearish disappointment for spring wheat bulls. Friday's weather map saw more scattered showers on the western edge of the southwestern Plains with most of the rain falling in Texas. The next seven days expect light to moderate amounts in the southwestern Plains, which shouldn't be a problem for winter wheat planting. Technically, both Chicago and K.C. wheat hit new six-week highs this week, but fundamentally, it is difficult to see much upside potential at this time of year while supplies remain plentiful. Commercial buying is helping to support Chicago wheat prices in the low to mid $4s, but show no sign of wanting to push prices significantly higher. DTN's National SRW index closed at $4.11 Thursday, priced 44 cents below the December contract and near its highest price in six weeks. DTN's National HRW index closed at $3.76, also near its highest price in six weeks.

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

Follow Todd Hultman on Twitter @ToddHultman1

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