DTN Before The Bell Grain Comments

Grains Slightly Higher as Winter Storm Approaches

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

Morning CME Globex Update:

December corn and January soybeans were starting a little higher as the Northern Plains brace for high winds and wintry conditions the next few days. December K.C. wheat is up a tick, showing no concern about the expectation of subfreezing temperatures as far south as the Texas Panhandle this weekend.

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 half-cent early Thursday, staying close to $3.50 while the Northern Plains are less than 24 hours away from an October winter storm. Judging by prices, traders do not seem concerned that much corn will be lost, but there is a high wind warning in the Dakotas threatening standing crops. On the demand side, corn exports remain slow. Early Thursday, USDA said last week's export sales and shipments of corn totaled 50.7 million bushels and 23.8 mb respectively, higher amounts than a week ago, but still a bearish pace with total corn shipments down 42% in 2017-18 from a year ago. Technically, the trend in December corn remains sideways while fundamental supply pressures and outside market concerns are currently bearish. DTN's National Corn Index closed at $3.07 Wednesday, 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 0.38 after the European Central Bank announced it will reduce its pace of monthly asset purchases, starting in January, while Europe's economy shows signs of gradual improvement.

Soybeans:

January soybeans were up 2 3/4 cents early Thursday, also not showing much concern about the impending threat of winter storms in the Northern Plains even though some soybeans will still be in the fields and can be more vulnerable to loss than corn. While the U.S. experiences a more wintry-like October, the growing season is just getting started down south and next week's forecast is still expecting much-needed rain for central Brazil. Brazil's dry start is having an impact on Brazil's FOB soybean prices, currently giving the U.S. Gulf a 29-cent advantage. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 78.2 mb and 92.7 mb respectively, a higher combination than last week, but still bearish with total soybean shipments down 7% in 2017-18 from a year ago. Technically, the trend in January soybeans remains up with a lot riding on the outcome of Brazil's next crop. DTN's National Soybean Index closed at $8.96 Wednesday, priced 79 cents below the November contract and down from its highest price in over two months.

Wheat:

December K.C. wheat was up a quarter-cent early Thursday with noncommercial traders not panicking out of their shorts yet, even though subfreezing temperatures are expected to reach as far south as the Texas Panhandle this weekend. It is possible that the newly-emerged winter wheat crop could suffer damage from this weekend's cold, but with winter wheat, the market has seen too many examples of times when the damage was not as bad as feared. And there is so much wheat available around the world anyway that the market would not miss a little here and there. If wheat prices do react higher, it will likely be a short-term response of noncommercial short-covering. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 13.2 mb and 4.4 mb respectively, bearish amounts for the week which continue to remind us that world wheat supplies are plentiful and leaving little export business for the U.S. Technically, the trend remains sideways in winter wheat with ongoing bearish pressure likely through the winter months. DTN's National SRW index closed at $3.97 Wednesday, priced 38 cents below the December contract and 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