Morning CME Globex Update:
At 8 a.m. CDT, USDA said Mexico bought 53.4 million bushels (1,356,360 mt) of U.S. corn, 33.3 million bushels of which were for 2017-18 and the remainder for the following season. Before the announcement, corn, soybeans, and wheat were all a little higher early Thursday, finding some buying interest after this week's lower start.
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At 8 a.m. CDT, USDA said Mexico bought 53.4 million bushels (1,356,360 mt) of U.S. corn, 33.3 million bushels of which were for 2017-18 and the remainder for the following season. Earlier, December corn was up 3/4 cent, helped by light commercial buying that continues to support prices in their sideways trading range. Thursday's weather map is starting out with warmer temperatures, drier conditions across the Midwest, and less wind - all of which should be helpful for harvest. Progress has been slower in the eastern Midwest lately where fields are wetter and more rain is expected to return this weekend. On the demand side, corn exports are off to a slow start in the new season. Thursday's numbers from USDA showed last week's corn export sales and shipments at 31.9 and 23.6 million bushels respectively - bearish amounts for the week that have total corn shipments down 41% in 2017-18 from a year ago. Technically, the trend in December corn remains sideways during a time when seasonal lows are typically made. One bullish market clue is that December corn's attempt at a new low on Oct. 12 has not yet shown any follow-through selling. DTN's National Corn Index closed at $3.07 Wednesday, priced 42 cents below the December contract and is still holding above its August low. In outside markets, the December U.S. dollar index is down 0.18 with Bloomberg News reporting that President Trump will announce the next Fed Chair at 2 p.m. CDT. Many news sources expect Jerome Powell to get the nod - a supporter of the current Fed policy of gradual rate hikes. Also, the Bank of England raised its interest rate for the first time in over ten years, from .25% to .50%.
January soybeans were up 3 3/4 cents early Thursday, supported by early crop concerns in Brazil and the bullish affect that should be having on U.S. export business. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 72.3 and 98.8 million bushels respectively, a neutral-to-bearish combination that has total soybean shipments down 8% in 2017-18 from a year ago. With FOB soybean prices 25 cents a bushel higher at Brazil's ports than at the U.S. Gulf, it is a bit concerning that U.S. exports aren't doing better, but it is still early and plenty of uncertainty remains in Brazil's new season. Central Brazil is expecting beneficial rains in this week's forecast, but so far, actual amounts have been light. Here in the U.S., many areas in the western and central Midwest should be finishing harvest while the eastern Midwest has been slowed by wetter conditions. Technically, the trend remains up in January soybeans, but it may be difficult to exceed the October high of $10.13 until more is known about Brazil's next crop. DTN's National Soybean Index closed at $9.06 Wednesday, priced 85 cents below the January contract and down from its highest price in over two months. 50 delivery intentions were reported for November soybeans early Thursday.
December Chicago wheat was up 2 3/4 cents early Thursday, a show of bargain-hunting after Tuesday's prices finished at a new contract low. Fundamentally speaking, there is nothing bullish happening for wheat at this time as U.S. supplies are high and exports have been low. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 12.8 and 13.9 million bushels respectively, neutral-to-bearish amounts for the week that have total wheat shipments down 5% in 2017-18 from a year ago. For any producer so inclined, Thursday is shaping up to be a pleasant fall day across the southern Plains for winter wheat planting with warmer temperatures and lighter winds. Technically, Tuesday's new low in December Chicago wheat turned the trend lower again, but at these low prices, it is difficult to expect much downside potential. What is more likely is that futures contracts will continue to watch premiums erode while cash wheat prices stay roughly stable. DTN's National SRW index closed at $3.81 Wednesday, priced 37 cents below the December contract and holding above its August low.
Todd Hultman can be reached at firstname.lastname@example.org
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