DTN Closing Grain Comments

By Darin Newsom
DTN Senior Analyst

General Comments:

December corn was 3 3/4 cents lower at $3.51 1/2 with March 3 1/2 cents lower at $3.64 1/4. November soybeans finished 11 cents lower at $9.57 1/4 with January down 10 3/4 cents at $9.67 3/4. December Chicago wheat closed 3 1/2 cents lower at $4.44 3/4, December Kansas City lost 3 1/2 cents to $4.39 1/4, and December Minneapolis fell 12 1/2 cents to close at $6.11 1/4. The U.S. dollar index was 0.50 higher at 93.58 while December 30-year T-bonds lost 3/32 to 152'23. December gold was $7.70 lower at $1,277.10 with December silver $0.031 lower and December copper down $0.0045. The Dow Jones Industrial Average gained 130 points to 22,535. November crude oil fell $1.21 to $50.46. The November distillates (heating oil) contract was $0.0504 lower, November RBOB gasoline fell $0.0445, and November natural gas dropped $0.026.

Corn:

Poor ol' December corn. A session after a technical rally, given its fundamentals continue to grow more bearish, appeared to finally break the contract out of its doldrums, renewed commercial selling sunk the contract to start a new month. This selling occurred despite rains over parts of the U.S. Midwest this past weekend slowing harvest. This selling continued despite the announced sale of 597,464 metric tons of 2017-18 U.S. corn to Mexico. This selling remains in place because the U.S. is still dealing with too much corn given USDA's Sept. 1 quarterly stocks figure of 2.295 billion bushel (released last Friday) and what is still projected to be a 14 bb-plus crop this fall. However, since there wasn't a great deal of selling enthusiasm for much of Monday's session, the market could see light buying interest early in the overnight session.

Soybeans:

It seems the misplaced bullish euphoria that erupted following the release of USDA's Sept. 1 quarterly stocks figure of 301 million bushel last Friday has completely dissipated. Yes, November soybeans gave back half of its initial rally before Friday's close. And also yes, the contract quickly erased the last vestiges of those gains on Monday's open on its way to a test of minor (short-term) technical support. This support sits at the $9.54 level, and though light buying interest could be seen early in the overnight session, another wave of commercial selling is expected to hit the market in the coming days. USDA announced a sale of 132,000 mt of 2017-18 supplies to China earlier in the day, but it did nothing to stem the bearish tide. No, the short-term trend is down and the contract seems willing to let that trend runs its course.

Wheat:

Just in case anyone needed a reminder, wheat of any class is a cockroach. This was hinted at again last Friday as USDA released its Small Grains Summary report that pegged U.S. spring wheat production at 416 mb. While this was well below last year's production figure of 493 mb, as expected, what wasn't expected was for it to still be this large. The 416 mb was near the high-end of pre-report guesses at 420 mb. This sparked strong commercial selling late Friday, selling that began again Sunday night into Monday morning, and lasted all day Monday. This was enough to pull winter wheat lower, particularly since the winter markets have no particular reason to rally at this time. Add in the stronger U.S. dollar index and bullish wheat traders were all but extinct to start the month.

Darin Newsom can be reached at darin.newsom@dtn.com

Follow Darin Newsom on Twitter @DarinNewsom

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