DTN Closing Grain Comments

Grains Show Rebound in Early November

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

General Comments:

Corn was up 2 1/4 cents in the December contract and up 2 cents in the July. Soybeans were up 8 cents in the January contract and up 8 1/4 cents in the July. Wheat closed up 8 cents in the December Chicago contract, up 10 cents in the December Kansas City and was up 8 3/4 cents in the December Minneapolis contract.

The December U.S. dollar index is down 0.07 at 94.64. December gold is up $0.40 at $1,277.70 while December silver is down 7 cents and December copper is up $0.0345. The Dow Jones Industrial Average is up 30 at 23,465. December crude oil is up $0.15 at $54.45. December heating oil is down $0.0068 while December RBOB gasoline is up $0.0251 and December natural gas is up $0.043.

Corn:

December corn closed up 2 1/4 cents Thursday at $3.50 1/2, helped again by light commercial buying after prices got close to their 2017 lows earlier this week. Light scattered showers continue to pester fields in the eastern Midwest with more rain expected in the region the next seven days. The rest of the Corn Belt will be drier with warmer temperatures the next few days helping harvest progress. On the demand side, corn exports are off to a slow start and USDA's report of last week's corn sales and shipments came in at 31.9 million bushels and 23.6 mb respectively - bearish amounts for the week that have total corn shipments down 41% in 2017-18 from a year ago. At 8 a.m. CDT however, USDA surprised markets with news that Mexico bought 53.4 mb (1,356,360 metric tons) of U.S. corn, 33.3 mb of which were for 2017-18 and the rest for the following season. In spite of a bearish fundamental outlook for corn prices that has been well known for months, it is impressive that December corn remains in a sideways trading range and has yet to follow through on the new low attempted on Oct. 12. 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 0.07 after the Bank of England raised its interest rate for the first time in over 10 years, from .25% to .50%. President Trump is expected to name the next Fed Chair at 2 p.m. CDT.

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Soybeans:

January soybeans closed up 8 cents Thursday at $9.99 1/4 with help from a return of commercial buying in soybean meal and at a time when Brazil's new soybean crop continues to deal with dry weather concerns. This week's forecast still expects a broad coverage of beneficial rains for central Brazil, but so far, actual amounts have been light. Here in the U.S., soybean harvest should make good progress this week in the western and central Midwest where many areas are finishing up, but harvest in the eastern Midwest remains difficult with more rain expected this weekend. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 72.3 mb and 98.8 mb respectively, a neutral-to-bearish combination that has total soybean shipments down 8% in 2017-18 from a year ago. This season's slower pace is a little concerning, but so far, local FOB soybean prices continue to favor U.S. exports. Technically, the trend remains up in January soybeans and a lot is depending on Brazil's ability to come up with another big crop in early 2018. 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. Fifty delivery intentions were reported for November soybeans early Thursday.

Wheat:

December Chicago wheat showed a modest rebound from Wednesday's new low and closed up 8 cents at $4.26. The largest percentage gain in grains happened in December Kansas City wheat where prices were up a dime at $4.25 3/4 on lighter volume. There was no obvious bullish news to point to, but Friday's CFTC data may show us that commercials took advantage of this week's new lows to add long positions. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 12.8 mb and 13.9 mb respectively, neutral-to-bearish amounts for the week that have total wheat shipments down 5% in 2017-18 from a year ago. Unfortunately for producers, that lackluster pace is not enough to make a dent in the 960 mb of U.S. ending wheat stocks USDA is estimating, so it is going to be difficult to sustain wheat prices much above their lows. Technically, both Chicago and K.C. wheat are in downtrends, but downside potential is likely limited at these low prices and a more sideways trend is likely. DTN's National SRW index closed at $3.81 Wednesday, priced 37 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.50, 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