DTN Before The Bell Grain Comments

Grains Pull Back Early Tuesday

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

Morning CME Globex Update:

After Monday's impressive rebound in corn and winter wheat prices, Tuesday morning's start looks more familiar with grains a little lower across the board. November soybeans were down 3 1/4 cents after USDA reported the soybean harvest at 70% finished.

Other Markets:

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

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Corn:

After a bearish Friday and a bullish Monday, December corn was down a penny early Tuesday, staying in its same sideways range of the past eight weeks while corn harvest continues to make slow progress. Late Monday, USDA said 38% of corn was harvested, down from the five-year average of 59%. The seven-day forecast looks mostly dry for the western and central Corn Belt, but more rain in the Western Corn Belt and around the Great Lakes will add to delays there. North Dakota and Minnesota are in for some snow on Thursday and Friday. This is the time of year when seasonal lows are typically made in corn, but prices could have a tougher time rallying than usual in the months ahead with 14.28 billion bushels of new supplies and outside market influences not helping. Two things that would help long-term corn prices would be the announcement of a Fed Chair that is not in a hurry to increase interest rates and a new NAFTA agreement. Technically, the trend in December corn remains sideways with help from commercial support in the low to mid $3s. DTN's National Corn Index closed at $3.07 Monday, 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 down 0.04, quiet and staying near its highest prices in three months.

Soybeans:

November soybeans were down 3 1/4 cents with a better show of harvest progress and December soybean oil trading down 0.20, backing down from Monday's new four-week high. Late Monday, USDA said 70% of soybeans were harvested, close to the five-year average of 73% and boosted by last week's favorable weather. This week's weather will be windier and cooler, but should still be good for harvest progress in the western and central Midwest while the eastern Midwest will be interrupted by more rain. Weather is also important in Brazil again and early conditions are dry in central Brazil, but better chances for rain are expected next week and that has sent Brazil's local soybean prices lower. Even so, FOB soybean prices are 13 cents cheaper at the U.S. Gulf than at Brazil's ports so export business should continue to favor the U.S. Technically, the trend in November soybeans is up and prices are vulnerable to changes in South American weather. DTN's National Soybean Index closed at $9.01 Monday, priced 80 cents below the November contract and down from its highest price in over two months.

Wheat:

December Chicago wheat was down 2 1/2 cents early Tuesday, already trimming back part of Monday's big gain. Concerns about the possibility of freezing temperatures hitting young winter wheat crops in the southwestern Plains later this week were part of Monday's reasons for buying wheat, but it is difficult to take those kinds of concerns too seriously as winter wheat has seen far worse many times before. Late Monday, USDA said 75% of winter wheat was planted, near the five-year average of 80% and 52% of the crop was emerged. Planting in Kansas continues to drag its feet at only 67% completed and remains a hint of lower wheat acres this fall. Technically, the trend in Chicago wheat remains sideways, thanks to commercial buying in the lower $4s -- some of which we saw again on Monday. DTN's National SRW index closed at $3.98 Monday, 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