DTN Closing Grain Comments

Grains Quietly Lower Monday

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

General Comments:

Corn was unchanged in the December contract and up 1/4 cent in the July. Soybeans were down 2 cents in the January contract and down 1 1/4 cents in the July. Wheat closed down 2 1/2 cents in the December Chicago contract, down 3 1/2 cents in the December Kansas City, and up 1 1/2 cents in the December Minneapolis contract. The December U.S. dollar index is down 0.32 at 94.50. December gold is up $5.70 at $1,277.50 while December silver is up 8 cents and December copper is up $0.0070. The Dow Jones Industrial Average is down 75 at 23,360. December crude oil is up $0.23 at $54.13. December heating oil is up $0.0052 while December RBOB gasoline is down $0.0059 and December natural gas is up $0.003.

Corn:

December corn ended Monday right where it left off on Friday, at $3.48 3/4 and still stuck in the same narrow, sideways range that prices have been in the past two months. Monday afternoon's Crop Progress report will show some harvest progress in spite of last week's wintry conditions in the Northern Plains and rain in the Eastern Corn Belt. The forecast for the week ahead is mostly dry, except for east of Illinois and more combines are apt to be taking on corn this week as soybean fields are getting done. On the demand side, corn exports are starting the season slow and Monday's inspections report saw the same thing. USDA said 20.4 million bushels of corn were inspected for export last week, a bearish amount that put the total down 45% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials still bearish in corn with 70,556 net shorts as of Oct. 24. Commercials increased net longs from 47,983 to 60,139, continuing to be an important source of support for corn at these cheaper prices. Technically, the trend in corn remains sideways with roughly half of the 14.28 billion bushels of new supply that USDA estimates now harvested. DTN's National Corn Index closed at $3.06 Friday, priced 43 cents below the December contract and is still holding above its August low. In outside markets, the December U.S. dollar index is down 0.32 after President Trump's campaign manager was indicted on conspiracy charges and while traders also wait to hear the president's choice for the next Fed chair. December gold is up $5.70.

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Soybeans:

January soybeans closed down 2 cents Monday at $9.84 1/2, unable to hold the small gain it started the day with. Monday afternoon's update on soybean harvest progress will be interesting and could show a jump as producers pushed to get soybeans in ahead of last week's winter storms in the Northern Plains and wet weather in the eastern Midwest. Monday saw more windy conditions in the western Plains, but better harvest weather is expected to help bring in the final rounds of soybeans later this week. The situation in Brazil is currently a mixed bag with central Brazil expecting much-needed rain this week while conditions have been too wet in parts of southern Brazil. Early season concerns are showing up in Brazil's local prices and FOB prices are now 36 cents more expensive at Brazil's ports than at the U.S. Gulf -- an unusually wide spread that favors U.S. exports. Monday morning, USDA said 92.1 million bushels of soybeans were inspected for export last week, a decent amount, but the early overall pace is still bearish with total inspections down 10% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials lightened bullish positions in soybeans, going from 81,884 to 56,493 net longs as of Oct. 24. Technically, the trend in January soybeans remains up with producers still trying to bring in this year's record 4.43 billion bushel harvest. DTN's National Soybean Index closed at $8.96 Friday, priced 79 cents below the November contract and down from its highest price in over two months.

Wheat:

December Chicago wheat ended down 2 1/2 cents Monday at $4.24 3/4, spending the entire day trading quietly lower, but reluctant to take out the August low of $4.22 1/2. Friday's CFTC data did not show much change in traders' positions in Chicago wheat with 32,903 net shorts as of Oct. 24. Commercials slightly increased net longs to 39,074 and continue to be the sole source of support for this market. Winter wheat planting would normally be getting close to 90% finished this time of year, but this year's lack of enthusiasm for winter wheat's low prices may have producers considering other alternatives for 2018. For those who want to plant, the forecast looks favorable with dry conditions expected throughout the southwestern U.S. Plains. Winter wheat prices remain under bearish pressure from plentiful inventories of U.S. and world wheat, but so far, the trends in both December Chicago and December K.C. wheat remain sideways. DTN's National SRW index closed at $3.90 Friday, priced 38 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.54, 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