DTN Closing Grain Comments

Talk of Rain in Brazil Sends Soybeans Lower

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

General Comments:

Corn was up 1 1/2 cents in the December contract and up 1 1/2 cents in the July. Soybeans were down 5 1/4 cents in the November contract and down 5 cents in the July. Wheat closed up 1 1/4 cents in the December Chicago contract, up 1/2 cent in the December Kansas City, and up 4 3/4 cents in the December Minneapolis contract. The December U.S. dollar index is up 0.04 at 93.85. December gold is down $2.90 at $1,278.00 while December silver is down 12 cents and December copper is up $0.0105. The Dow Jones Industrial Average is up 194 at 23,468. December crude oil is up $0.57 at $52.47. December heating oil is up $0.0251 while December RBOB gasoline is up $0.0302 and December natural gas is down $0.015.

Corn:

December corn finished up 1 1/2 cents Tuesday, adding to Monday's gain, but staying well within the same sideways trading range that prices have held in the past eight weeks. This year's harvest pace is slower than usual, but there seems little concern that the big 14-plus billion bushel crop won't eventually get put away. USDA said 38% of corn was harvested, down from the five-year average of 59%. Corn harvest progress was at 23% for Iowa and below 20% in the Dakotas and Minnesota as producers are still trying to finish soybeans. As explained in Tuesday's article, "Corn's Other Bearish Concerns," this fall's bearish price pressure isn't all due to the big harvest. Talk of tax reform and a possible rate hawk as the next Fed chair are boosting the U.S. dollar higher and no progress on NAFTA is becoming worrisome for U.S. ag markets, in general. These issues could still go either way, but for now, the trend remains sideways in December corn, helped by 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 bullish stars of the day were cattle and feeders as they ignored Friday's higher-than-expected September placements from USDA.

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Soybeans:

November soybeans dropped 5 1/4 cents Tuesday, pressured by much-needed rain in next week's forecast for central Brazil and a jump in U.S. harvest progress after last week's nice fall weather. Late Monday, USDA said 70% of soybeans were harvested, close to the five-year average of 73%. It was also interesting that harvest progress was above 80% in the Dakotas and Minnesota, pushing to get those beans in before northern weather has a chance to cause problems. Technically, the trend remains up in November soybeans, but we have not seen a new two-month high since Oct. 13 as this fall's record harvest continues to weigh on prices and a lot is riding on the success of Brazil's next crop. On the demand side, Dow Jones reported China's soybean imports were up 13% in September from a year ago and up 15% in the first nine months of 2017 from a year ago -- a bullish appetite that is helping to keep prices supported well above their 2017 lows. 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 ended up 1 1/4 cents Tuesday, staying fairly quiet and adding to Monday's double-digit gain. Late Monday, USDA estimated 75% of winter wheat was planted and 52% was emerged, a little below their usual paces. USDA's estimate that Kansas is 67% planted, down from its five-year average of 86%, remains a clue that winter wheat plantings may be lower-than-expected for 2018 (never mind that we don't yet know the size of planting USDA is expecting). As reported Monday, there is still a possibility that newly emerged winter wheat crops will get hit with sub-freezing temperatures later this week, but noncommercial shorts aren't showing much reaction yet, knowing wheat has survived worse. With USDA estimating 960 million bushels of U.S. ending wheat stocks and far more internationally to compete with for exports, Chicago wheat prices remain under bearish pressure, but are holding a sideways trading range, thanks to commercial support in the low $4s. DTN's National SRW index closed at $3.98 Monday, priced 39 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.60, 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