DTN Closing Grain Comments

Grains Finish Week With A Thud

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

General Comments:

Corn closed down 4 1/2 cents in the December contract and down 3 1/2 cents in the July. Soybeans closed down 7 3/4 cents in the November and down 7 1/4 cents in the July. Wheat closed down 6 3/4 cents in the December Chicago, down 6 1/2 cents in the December Kansas City, and down 4 1/2 cents in the December Minneapolis. The December U.S. dollar index is up 0.48 at 93.60. December gold is down $9.30 at $1,280.70 while December silver is down $0.21 and December copper is down 0.0020. The Dow Jones Industrial Average is up 147 at 23,310. December crude oil is up $0.21 at $51.72. December heating oil is up $0.253, December RBOB gasoline is up $0.0251, and December natural gas is up $0.026.

For the week:

December corn closed down 8 1/4 cents and July closed down 7 3/4 cents. November soybeans were down 21 1/2 cents while the July was down 19 cents. December Chicago wheat was down 13 1/2 cents, December Kansas City wheat was down 13 1/2 cents, and December Minneapolis wheat was down 3 3/4 cents.

Corn:

December corn closed down 4 1/2 cents Friday and was down 8 1/4 cents on the week, ending within a tick of its August low. Even though this is the time of year when prices typically start to make a seasonal turn higher, corn has struggled to rise above its lows and anecdotes of higher-than-expected yields around the Midwest are likely the source of those problems. On the demand side, the export pace has been slow, but more sales were announced this week. Early Friday, USDA said 4.9 million bushels (125,000 mt) of U.S. corn sold to unknown destinations and 4.7 million bushels (120,000 mt) sold to Spain, both for 2017-18. All sales are welcome, but we can't fool ourselves that this fall's corn piles are going to disappear anytime soon. Technically, the trend in corn is still sideways, but vulnerable to new lows 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 0.48 after the U.S. Senate approved a budget plan and with many still guessing which candidate President Trump will select as the next Chairman of the Federal Reserve.

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Soybeans:

November soybeans closed down 7 3/4 cents Friday and was down 21 1/2 cents on a week when significant harvest progress was likely achieved. USDA's record crop estimate of 4.43 billion bushels is no small matter, but prices have been caught in a tug of war as demand has done an admirable job of keeping up with ever-increasing harvests. The other factor helping soybean prices lately has been this year's dry start in central Brazil. There are better chances for rain in next week's forecast for central Brazil and we will continue to monitor those developments. Dow Jones quoted the private consultant, AgRural, as saying Brazil's soybeans were 20% planted, in line with the five-year average. So far in 2017-18, U.S. soybean shipments are down 7% from a year ago, but FOB soybean prices continue to favor U.S. soybean exports over Brazil. Early Friday, USDA said China bought 7.3 million bushels (198,000 mt) of U.S. soybeans for 2017-18. Technically, the trend remains up in November soybeans with resistance around $10. 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 closed down 6 3/4 cents Friday and was down 13 1/2 cents on a week when buyers were hard to find. This week's warm and dry fall weather offered good opportunities for winter wheat planting with rain expected to follow this weekend in the central, southern, and eastern Midwest. It is still not clear how much winter wheat producers are willing to plant and, judging by the slow pace of planting progress, a smaller planting seems likely. That may help winter wheat prices in the spring, but will not offer much consolation this winter while world wheat supplies are plentiful and are taking away U.S. exports. With no threat to winter wheat supplies, noncommercials are likely to remain net short and the only source of support is commercial buying at these lower levels. DTN's National SRW index closed at $3.93 Thursday, priced 39 cents below the December contract and holding above its August low. DTN's National HRW index closed at $3.56, also 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