DTN Before The Bell Grain Comments

Soybeans Continue a Little Higher

Todd Hultman
By  Todd Hultman , DTN Grains Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

November soybeans were modestly higher early Friday, still finding benefit from USDA's lower-than-expected ending stocks estimate of 430 million bushels on Thursday. Corn and wheat were slightly higher in quiet overnight trade.

Other Markets:

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

Corn:

December corn was up 1 1/2 cents early Friday, still not far from its lows for 2017 after USDA raised its production estimate to 14.28 billion bushels, based on a higher yield of 171.8 bushels an acre. 2.34 billion bushels of estimated ending corn stocks for the U.S. in 2017-18 is a big surplus that is making it difficult for prices to get out from under this year's harvest pressure. Saturday will bring rain from Missouri to Michigan and Ontario, but otherwise the next seven days looks mostly favorable for harvest across the Corn Belt. Early Friday, USDA said last week's sales and shipments of corn totaled 62.7 and 26.4 million bushels respectively, a bearish combination for the week that put total shipments down 44% from a year ago in 2017-18. Technically, December corn has held sideways for over a month, but is having difficulty setting a seasonal low with so much supply about ready to show up. DTN's National Corn Index closed at $3.05 Thursday, priced 44 cents below the December contract and still holding above its August low. In outside markets, the December U.S. dollar index isdown 0.19 after the U.S. Labor Department said consumer prices were up .5% in September and up 2.2% from a year ago.

Soybeans:

November soybeans were up 3 3/4 cents early Friday, finding support from USDA's lower-than-expected U.S. ending stocks estimate of 430 million bushels. Part of Thursday's reduction was expected after the Sep. 29 Grain Stocks report, but prices also showed bullish relief that USDA's soybean production was not raised from September's 4.43 billion bushels. 430 million bushels of ending supplies is not a tight scenario, but keep in mind that demand has a way of reducing USDA's ending stocks estimates over time and in Brazil, USDA is estimating ending soybean stocks at just 184 million bushels after harvesting a 4.19 billion bushel crop earlier this year. Early Friday, USDA said last week's export sales and shipments of soybeans totaled 64.2 and 43.7 million bushels respectively, neutral amounts for the week. Technically, the trend remains up in November soybeans and early dry conditions remain a concern in central Brazil. DTN's National Soybean Index closed at $9.15 Thursday, priced 77 cents below the November contract and at its highest close in over two months.

Wheat:

December Chicago wheat was up 1 1/4 cents early, still holding above its August low even though USDA raised its estimate of ending world wheat stocks from 263.1 to a record high 268.1 mmt. Increased crop estimates for Europe, India, and Russia accounted for most of the gain and is disappointing for wheat producers seeing little price appreciation coming from lower production in the U.S., Canada, and Australia. The seven-day forecast expects only light rain across the southwestern Plains and that should be favorable for those still interested in winter wheat planting. Early Friday, USDA said last week's export sales and shipments of wheat totaled 6.4 and 12.0 million bushels, bearish amounts for the week. Technically, Chicago wheat prices have leveled off, thanks to commercial buying in the low $4s, but without a bullish fundamental argument, wheat prices are likely to track sideways through winter. DTN's National SRW index closed at $3.91 Thursday, priced 39 cents below the December contract and holding above its August low.

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

FollowTodd on Twitter @ToddHultman1

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Todd Hultman