DTN Before The Bell Grain Comments

Grains Mixed, Barely Moving

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

Morning CME Globex Update:

Little movement was seen in grain and oilseed prices overnight with corn and wheat staying near their lowest levels in 2017. The western and central Midwest will continue to have good harvest opportunities this week while the eastern Midwest encounters more rain.

Other Markets:

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

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Corn:

December corn was up a quarter-cent early Monday, staying near its lows in 2017 after the weekend saw showers in the central and Southern Plains, now working across the eastern U.S. The seven-day forecast expects mostly dry weather to help harvest progress in the western and central Corn Belt while most rain chances stay around the Great Lakes and eastern third of the U.S. With USDA estimating 14.28 billion bushels of new corn supplies on the way and exports off to a slow start in 2017-18, this continues to be a difficult time for corn prices, but so far a sideways trend is holding. Friday's CFTC data showed noncommercials modestly bearish in corn with 64,177 net shorts as of Oct. 17. Commercials increased net longs to 47,983, still finding attractive value in corn's lower prices. 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 0.28 with traders watching for a possible Fed Chair announcement from the White House by Halloween.

Soybeans:

November soybeans were down a half-cent early Monday, a cautious start to October's final full week as harvest continues to make progress where fields are dry enough. Monday afternoon's Crop Progress report will give an interesting update on how much progress was made after harvest conditions were favorable nearly all week until rain came to the central and southern Plains over the weekend. The eastern Midwest is in for more rain this week while the western and central Midwest are expected to stay mostly dry. USDA's estimate of a record high 4.43 bb crop is a lot of soybeans for the market to absorb, but a big crop has been anticipated for months and so far, demand has done a good job to almost keep pace with production. A new risk for soybeans of late has come from its increased popularity among traders. Friday's CFTC data showed noncommercials turned increasingly bullish in soybeans with 81,884 net longs as of Oct. 17. In spite of a record harvest, the trend in November soybeans remains up with resistance around the $10 mark. 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 was unchanged early, finding no clear direction to start the new week. The eastern side of the southwestern U.S. Plains saw rain over the weekend, but not much is expected for the region the next seven days. SRW wheat areas are getting rain Monday and will have more chances this week. Monday afternoon's Crop Progress report will give an update on winter wheat planting progress and there is still a concern that these low wheat prices will keep plantings down for 2018. Friday's CFTC data showed noncommercials bearish in Chicago wheat with 31,614 net shorts as of Oct. 17. Commercials increased net longs from 31,857 to 37,707, still finding wheat's cheaper prices attractive. As long as noncommercials don't get carried away on the short side, there is little reason to expect much of a wheat really for the next few months. A sideways trend in Chicago wheat seems the mostly likely path ahead, but occasional dips to new lows are possible. DTN's National SRW index closed at $3.87 Friday, 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