DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced 4.9 million bushels (125,000 metric tons) of U.S. corn sold to unknown destinations and 4.7 million bushels (120,000 mt) sold to Spain, both for 2017-18. 7.3 million bushels (198,000 mt) of U.S. soybeans were also sold to China for 2017-18. Before the announcements, grains were keeping a quiet tone and were starting slightly higher Friday, holding sideways ranges in corn and wheat while row-crop harvest enjoys one more day of dry, fall weather.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 4.9 million bushels (125,000 mt) of U.S. corn sold to unknown destinations and 4.7 mb (120,000 mt) sold to Spain, both for 2017-18. Earlier, December corn was up a half-cent Friday, trying to have more than one small gain this week while harvest makes progress. Friday is shaping up to be another pleasant fall day for harvest before rain returns to the Southern Plains and central Midwest on Saturday. The bulk of rains will catch the southeastern U.S. the next seven days but also cover parts of the central and eastern Midwest, slowing harvest progress. The extended forecast looks drier, and corn prices are showing no concern about not being able to bring in this year's 14.28 billion bushel crop. On the demand side, FOB corn prices continue to favor Brazilian exports over the U.S. and early U.S. shipments show it, currently down 46% in 2017-18 from a year ago. Technically, the trend in December corn has turned sideways and the traditional seasonal influence is for prices to work higher until late May. Higher prices however, may be difficult to achieve until we get farther past harvest. 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 is up 0.24 with lots of guessing about which candidate President Trump will select to be the next Chairman of the Federal Reserve.

Soybeans:

At 8 a.m. CDT, USDA announced 7.3 mb (198,000 mt) of U.S. soybeans were sold to China for 2017-18. November soybeans were up 3 1/2 cents earlier, helped by a new three-week high in December soybean oil to start the day. The excitement in soybean oil appears to be coming from a letter sent by EPA Administrator Pruitt to seven U.S. senators, reaffirming his commitment to mandate levels proposed in July. Soybean harvest likely made quick progress this week where fields were dry enough, and Friday offers one more day of good weather before rain returns to parts of the central and southern Midwest, moving eastward into early next week. The western Midwest is expected to remain dry, which will be helpful after last week's rains. The more serious weather concern for soybeans continues to be in central Brazil where the new season is off to a dry start. The extended forecast shows a better chance for light rain amounts, but we still have a whole season to get through. Falling soybean inventories and dry weather has FOB soybean prices at Brazil's ports 24 cents above prices at the U.S. Gulf and that is helping tilt export business to the U.S. Even though, the U.S. is bringing in another record soybean harvest, the trend remains up in November soybeans. DTN's National Soybean Index closed at $9.08 Thursday, priced 79 cents below the November contract and down from its highest price in over two months.

Wheat:

December Chicago wheat was up 2 1/4 cents early, still finding commercial support at the bottom edge of its sideways trading range. The bearish elephant in the room continues to be USDA's estimate of record high ending world wheat stocks, and if that weren't enough, the U.S. ending stocks estimate of 960 mb will keep end users well supplied in the year ahead. And it does not help that U.S. wheat shipments in 2017-18 are 5% lower than a year ago while Russia and Europe dominate wheat export business. It does help a little that Australia's wheat crop is expected to be down from last season's 33.5 mmt to 21.5 mmt in 2017-18. After a week of dry fall weather, it will be interesting to see on Monday afternoon if winter wheat planting made much progress or if it continues to look like producers are opting out of wheat in 2018. For the wheat that did get planted, beneficial showers are expected for all but the western edge of the winter wheat region the next seven days. DTN's National SRW index closed at $3.93 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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