DTN Before The Bell Grain Comments

Morning CME Globex Update:

As has been true all week, corn, soybeans and winter wheat are roughly steady to lower as the market waits for the next batch of numbers from USDA. USDA's Grain Stocks report and Small Grains Summary will be released at 11 a.m. CDT.

Other Markets:

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

Corn:

December corn was up 3/4 cent early Friday, still hiding in a narrow range on the final day of September as USDA gets ready to tell us ending U.S. corn stocks for 2016-17. Most guesses are right around 2.35 billion bushels, which if true, will be the largest ending stocks in 30 years and represent 16% of annual use. Right behind that supply is a 14.2 billion bushel crop that USDA is expecting for this fall's harvest and explains a lot about why prices are currently so low. Demand for U.S. corn slowed in the final quarter of 2016-17 as South American supplies came online, but as it stands now, FOB corn prices are roughly the same at the U.S. Gulf and at Brazil's ports. Technically, December corn remains in a downtrend but has not made a new low since Aug. 31, and we are in the time of year when seasonal lows are typically made. DTN's National Corn Index closed at $3.08 Thursday, priced 45 cents below the December contract and still up from its lowest price in 11 months. In outside markets, the December U.S. dollar index is down 0.09, holding a roughly 1-point gain on the week. Most other commodities are lower early, but December gold is up $1.50.

Soybeans:

November soybeans were down 3 cents early Friday, keeping a more bearish tone this week while Brazil shows increased chances for rain at planting time. USDA's 11 a.m. CDT Grain Stocks report is expected to show 339 million bushels of soybeans on hand as of Sept. 1, the most in 10 years. However, this report has held surprises before as it represents the final check and balance on USDA's WASDE estimates for 2016-17. Just as USDA is expecting a big corn harvest to follow Friday's ending stocks numbers, a record soybean harvest of 4.43 bb is expected to follow Friday's report and will keep supplies plentiful in the near term. The big difference between corn and soybeans is that soybean demand is much more active. With FOB soybean prices 22 cents cheaper at the Gulf of Mexico than at Brazil's ports, that active demand pace for U.S. soybeans should continue. Technically, the trend is up in November soybeans with resistance encountered at $9.90 and active 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 was down a quarter-cent early Friday, not showing much concern about Friday's USDA reports or scattered showers in the southwestern Plains, which should be mostly beneficial for winter wheat planting. Dow Jones' survey expects USDA to estimate Sept. 1 wheat stocks at 2.22 bb and 2017 production at 1.725 bb. Neither number is likely to have significant impact on Friday's wheat prices unless USDA is hiding a surprise in either corn or wheat. As with corn, current domestic wheat supplies are plentiful and make it difficult for prices to trade significantly higher as another growing season winds down in the northern Hemisphere. Technically, the trends in winter wheat turned higher this week, but fundamentally, it is difficult to expect more than a sideways trading range the next several months. DTN's National SRW index closed at $4.11 Thursday, 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

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