DTN Before The Bell Grain Comments

Few Treats Early Tuesday

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

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced 3.7 million bushels (100,000 mt) of HRW wheat was sold to Iraq for 2017-18. Before the announcement, corn and wheat were slightly lower, finding price movement difficult under the weight of plentiful supplies. January soybeans were up a little Tuesday, getting a lift from early commercial buying in soybean meal.

Other Markets:

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

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Corn:

December corn was down a half-cent early Tuesday, not budging from its sideways trading range of the past two months, even for Halloween. Late Monday, USDA said 54% of corn was harvested, still below the five-year average of 72% harvested, but picking up now that more soybean fields are finishing. Harvest progress may be interrupted by rain in the eastern Midwest later this week, but the rest of the Corn Belt is expected to be mostly dry and make good progress. December corn prices continue to be stuck near $3.50 while 14.3 billion bushels of new supplies discourage traders from buying corn, but not commercials. With South America still exporting this year's big corn harvests, the trend in corn remains sideways this fall. DTN's National Corn Index closed at $3.06 Monday, 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 up 0.11, not showing much reaction to several news accounts which say Jerome Powell is expected to be named the next Fed Chair. Also, real GDP in the European Union was reported up 2.5% in the third quarter from a year ago, slightly higher than expected said RTTNews.com.

Soybeans:

January soybeans were up 1 3/4 cents early Tuesday, holding firm after USDA said 83% of this year's soybean harvest was finished, in line with its usual pace for this time of year. Temperatures are below freezing in the northwestern Plains early Tuesday, but winds have calmed after Monday's strong gusts. The rest of the week is expected to be favorable for harvest, except for increased rain chances in the eastern Midwest later this week. Meanwhile, central Brazil is expecting better chances for rain this week, but with Brazil's FOB soybean prices sitting 34 cents above the U.S. Gulf, locals seem to have concerns about this year's soybean crop and that is favoring U.S. export business. With a record 4.43 billion bushel U.S. harvest almost done, January soybeans have not seen a new high since Oct. 13, but so far, prices are holding their uptrend. DTN's National Soybean Index closed at $8.94 Monday, priced 79 cents below the November contract and down from its highest price in over two months.

Wheat:

At 8 a.m. CDT, USDA announced 3.7 million bushels (100,000 mt) of HRW wheat was sold to Iraq for 2017-18. Earlier, December Chicago wheat was down a half-cent, gradually getting closer to the 2017 low of $4.22 1/2, but not going anywhere fast. Late Monday, USDA said 84% of winter wheat was planted and 65% of the crop was emerged, both a little lower than their usual paces. Of course, the important missing variable is USDA's estimate of what constitutes 100% planted and it is fair to wonder if winter wheat plantings will be lower this fall, given wheat's chronic low prices. Tuesday morning's weather map shows snow in western Kansas and surrounding areas, but no sign of concern among traders. With USDA expecting U.S. ending wheat stocks of 960 million bushels and record world ending wheat stocks, it will be difficult to sustain much of a price rally this winter. For now, the trend in December Chicago wheat remains sideways with prices under bearish pressure. DTN's National SRW index closed at $3.88 Monday, priced 37 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