DTN Closing Grain Comments

Soybeans Fall Back; Grains End Lower

Todd Hultman
By  Todd Hultman , DTN Grains Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 2 1/4 cents in the December contract and down 2 3/4 cents in the July. Soybeans were down 9 1/4 cents in the November contract and down 8 1/4 cents in the July. Wheat closed down 3 cents in the December Chicago contract, down 2 1/2 cents in the December Kansas City, and down 5 1/2 cents in the December Minneapolis contract. The December U.S. dollar index is up 0.10 at 93.03. December gold is down $1.50 at $1,303.10 while December silver is down 5 cents and December copper is up $0.1055. The Dow Jones Industrial Average is up 49 at 22,921. November crude oil is up $0.42 at $51.87. November heating oil is up $0.0168 while November RBOB gasoline is down $0.0017 and November natural gas is down $0.062.

Corn:

December corn closed down 2 1/4 cents Monday on light volume, not straying from its new sideways range. After a rainy previous week and weekend around much of the Midwest, this week should be much better for harvest progress with warm fall temperatures and mostly dry conditions prevailing across the Corn Belt. Unfortunately for producers, good weather won't be any help for exports while FOB corn prices at the U.S. Gulf are 9 cents higher than at Brazil's ports. Monday morning, USDA said 12.7 million bushels of corn were inspected for export last week, a bearish amount which put total inspections down 50% in 2017-18 from a year ago. On the other hand, it has been encouraging for corn prices to see commercial interest in the mid-$3s and Friday's CFTC data showed a little more interest. CFTC said commercials increased net longs from 29,074 to 42,145 contracts as of Oct. 10 -- a good sign of corn's economic value at these lower prices. With no current bullish arguments for corn in view, noncommercials remain modestly bearish with 61,660 net shorts. Technically, the trend in corn remains down, but appears to be leveling as we get deeper into harvest. DTN's National Corn Index closed at $3.08 Friday, priced 43 cents below the December contract and still holding above its August low. In outside markets, November crude oil is up $0.42 after Iraq's military said it took back oilfields near Kirkuk from Kurdish control. December copper is up over 10 cents at a new three-year high as the world economy appears to be improving.

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Soybeans:

November soybeans fell 9 1/4 cents Monday, erasing Friday's gain, but still traded near its highest prices in over two months after USDA reduced its estimate of U.S. ending soybeans stocks to 430 million bushels last week. As with corn, soybean harvest activity should pick up this week with warmer temperatures and drier weather expected across the Midwest. It seems a little odd that prices are this high when the U.S. is also expecting a record high 4.43 billion bushel soybean harvest this fall, but world demand has been so strong that another big crop will be needed from Brazil in early 2018 to keep the flow of beans going. So far, conditions in central Brazil remain dry early in the new season. Early Monday, Dow Jones cited a report from ag consultant AgRural which said 12% of Brazil's soybeans have been planted so far, near the five-year average pace, but down from 18% a year ago. On the demand side, soybean exports have been active, but Monday's inspections report was bearishly low. USDA said 65.0 million bushels were inspected for export last week, putting total inspections down 8% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials lightly bullish in soybeans with 44,243 net longs as of Oct. 10, two days before USDA's WASDE report was released. The trend remains up in November soybeans with a lot riding on how well the next crop in Brazil comes along. DTN's National Soybean Index closed at $9.23 Friday, priced 77 cents below the November contract and at its highest price in over two months.

Wheat:

December Chicago wheat closed down 3 cents Monday on low volume, staying true to its sideways trading range of the past two months. USDA will have an update on winter wheat planting later Monday afternoon and it is still difficult to say if this year's planting is behind pace or if plantings are just not going to be as much as expected. Conditions in Missouri and Illinois were dry before this weekend, but overall conditions have been generally favorable for those who want to plant. One of wheat's concerns in 2017-18 is going to be a slow export pace and Monday's inspections report was more of the same. USDA said 11.9 million bushels of wheat were inspected for export last week, a neutral amount that has total inspections down 4% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials lightly bearish in Chicago wheat with 24,055 net shorts as of Oct. 10. Commercials increased net longs to 31,857 contracts, finding enough attractive value in wheat's low prices to help provide support for the current sideways range. DTN's National SRW index closed at $4.00 Friday, priced 40 cents below the December contract and holding above its August low. DTN's National HRW index closed at $3.60 and is also holding above its August low.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman