DTN Before The Bell Grain Comments

Grains Quiet, Slightly Lower

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

Morning CME Globex Update:

Wednesday morning finds grains slightly lower after another quiet overnight session. This week's weather has been favorable for harvest and has been unable to distract traders from large new supplies of U.S. row crops on the way.

Other Markets:

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

Corn:

December corn was down a quarter-cent early Wednesday, still holding sideways, but clearly under bearish pressure near its lowest prices of 2017 while harvest continues to make slow progress. This week's drier weather has been helpful and is expected to last through Friday before increased chances for rain appear in the Southern Plains, as far north as Missouri. The rest of the Midwest will be mostly dry over the weekend with warm, fall temperatures also helping harvest conditions. The U.S. saw a little more export activity this week, but FOB corn prices are still 10 cents cheaper at Brazil's ports than at the U.S. Gulf. That is likely to keep the export pace slow in the U.S. for at least another month. Technically, the trend in December corn is sideways, but with 14.28 billion bushels of new supply coming on, it has been difficult for prices to budge. DTN's National Corn Index closed at $3.06 Tuesday, priced 44 cents below the December contract and still holding above its August low. In outside markets, the December U.S. dollar index is up 0.19 and other commodities are mixed. The U.S. Census Bureau reported housing starts down 4.7% in September, but even with two major hurricanes, September's housing starts were still up 6.1% from a year ago.

Soybeans:

November soybeans were down 1 cent early after a quiet overnight session. Judging by the seven-day forecast, the second half of soybean harvest should be able to make good progress the next five days, aside from encountering rain in the Southern Plains this weekend. Early next week still looks favorable for the western Midwest, but the eastern Midwest is expected to turn wetter. Temperatures are forecast slightly cooler next week, but overall, no major problems are anticipated. Even though November soybean prices have pulled back from last week's new two-month high, the trend remains up and U.S. exports are holding an ace with FOB prices 22 cents cheaper at the U.S. Gulf than at Brazil's ports. For future soybean prices, a lot is riding on the outcome of Brazil's next crop and so far, central Brazil remains dry while rains continue to fall over southern Brazil. DTN's National Soybean Index closed at $9.07 Tuesday, priced 78 cents below the November contract and down from its highest price in over two months.

Wheat:

December Chicago wheat was down 2 1/4 cents Wednesday, still within its sideways trading range, but trolling near its lowest prices of 2017, with little on the horizon to give wheat prices a lift. The one concern that may help U.S. wheat prices in the spring is that this fall's slow planting pace may actually reflect a widespread decision to try crops other than wheat. Wheat prices received some benefit this year from lower plantings a year ago when combined with drought concerns in the Northern Plains, but the opportunity did not last long as other parts of the world quickly made up North American losses. Part of the Southern Plains and eastern Midwest will receive beneficial rains this weekend into early next week for winter wheat already planted. The western side of the southwestern Plains will stay mostly dry the next seven days. Technically, the trend remains sideways in Chicago wheat with commercial support in the low $4s. DTN's National SRW index closed at $3.96 Tuesday, 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