DTN Closing Grain Comments

Grains Bounce Back on Monday

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

General Comments:

Corn was up 6 3/4 cents in the December contract and up 6 1/4 cents in the July. Soybeans were up 2 cents in the November contract and up 1 3/4 cents in the July. Wheat closed up 10 3/4 cents in the December Chicago contract, up 10 3/4 cents in the December Kansas City, and up 3 3/4 cents in the December Minneapolis contract. The December U.S. dollar index is up 0.23 at 93.81. December gold is up $0.80 at $1,281.30 while December silver is down 1 cent and December copper is up $0.0180. The Dow Jones Industrial Average is up 3 at 23,331. December crude oil is up $0.14 at $51.98. December heating oil is down $0.0109 while December RBOB gasoline is down $0.0011 and December natural gas is up $0.045.

Corn:

December corn closed up 6 3/4 cents Monday, a fairly robust rebound for a market that traders appeared to be giving up on Friday. Last week provided pleasant fall weather for harvest and, even though colder temperatures are blowing in from the northwestern Plains on Monday, conditions are expected to stay mostly dry in the central and Western Corn Belt this week while the Eastern Corn Belt is expecting rain. With cheaper corn prices currently found in Brazil, corn exports in the U.S. have slowed lately, but Monday's weekly report showed 24.2 million bushels of corn inspected for export last week, a neutral amount for the week. Technically, the trend in December corn remains sideways, thanks to renewed commercial support. Friday's CFTC data showed commercials increased net longs in corn to 47,983, still finding attractive value in corn's lower prices. Noncommercial traders on the other hand, remained modestly bearish with 64,177 net shorts as of Oct. 17. DTN's National Corn Index closed at $3.01 Friday, priced 44 cents below the December contract and is still holding above its August low. In outside markets, the December U.S. dollar index is up 0.23 with traders watching to see if the White House names the next Fed Chair by Halloween.

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Soybeans:

November soybeans closed up 2 cents Monday, staying quietly steady while corn and winter wheat stole most of Monday's attention. Soybeans also got a little help from the oil side of the market after December palm oil closed up 1.6% early Monday at a new three-week high and December soybean oil followed with its highest close in four weeks. Monday afternoon's Crop Progress report is likely to show a significant advance in soybean harvest progress after last week's pleasant fall weather and may ease concerns about Monday's rains across the eastern Midwest. While USDA's expectation for a record 4.43 billion bushel harvest is an obvious bearish concern for soybean prices, the demand side of the market has been a source of support. Monday morning, USDA said 94.2 million bushels of soybeans were inspected for export last week, a neutral amount that has total inspections down 8% in 2017-18 from a year ago. Soybean prices lost ground in both the U.S. and Brazil last week, but U.S. exports are expected to continue as FOB prices remain cheaper in the U.S. Technically, the trend in November soybeans remains up, but resistance is likely near the $10 mark. Friday's CFTC data showed noncommercials turned increasingly bullish in soybeans with 81,884 net longs as of Oct. 17. DTN's National Soybean Index closed at $8.99 Friday, priced 80 cents below the November contract and down from its highest price in over two months.

Wheat:

December Chicago wheat and December K.C. wheat both closed up 10 3/4 cents Monday with new concerns about a possibility for freezing temperatures in the southwestern U.S. Plains early on Friday. The well-timed bounces came just after Friday's closes fell to within a few cents of their 2017 lows and were also helped by commercial buying. Friday's CFTC data showed noncommercials still bearish in Chicago wheat with 31,614 net shorts as of Oct. 17. Commercials however, increased net longs from 31,857 to 37,707, still finding wheat's cheaper prices attractive. Fundamentally, it has been difficult to find anything bullish to say about wheat lately and there is still a concern that Friday's potential freeze may not amount to much more than a pre-Halloween scare. The good news for wheat producers is that Monday's rebound came just in time to keep the sideways trend intact. DTN's National SRW index closed at $3.87 Friday, priced 39 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.50, 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