DTN Closing Grain Comments

Grains Mixed, Waiting on WASDE

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

General Comments:

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

The December U.S. dollar index is up 0.20 at 94.86. December gold is down $6.20 at $1,275.40 while December silver is down 30 cents and December copper is down $0.0675. The Dow Jones Industrial Average is down 16 at 23,532. December crude oil is down $0.22 at $57.13. December heating oil is down $0.0221 while December RBOB gasoline is down $0.0157 and December natural gas is up $0.021.

Corn:

December corn ended down a tick Tuesday, a third consecutive loss, but not large enough to get outside of its narrow, sideways trading range. This week's excuse for quiet trading is Thursday's WASDE report and many are expecting USDA to come up with a slightly higher yield estimate. The only thing close to bullish currently happening for corn is that the eastern Midwest continues to get rain. Forecast amounts are not much, but more is expected in the week ahead. Late Monday, USDA said 30% of the entire U.S. corn crop was still in the field. On the demand side, another export announcement of 5.1 million bushels (130,000 metric ton) to unknown trickled by early Tuesday, but the overall pace remains much lower than a year ago. For now, the trend in December corn remains sideways in spite of obvious bearish influences. DTN's National Corn Index closed at $3.07 Monday, priced 41 cents below the December contract and is still holding above its August low. In outside markets, December crude oil is down 22 cents a barrel with traders still wary of recent changes in Saudi Arabia. For a longer-term perspective of corn prices, see Tuesday's DTN article, "Corn's Diminishing Hangover."

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Soybeans:

January soybeans closed up 2 cents with modest help from buying in soybean oil while trading volume was light ahead of Thursday's WASDE report. Dow Jones' survey of analysts expects USDA to lower its estimate of U.S. soybean production from 4.43 to 4.40 billion bushels Thursday, but it may be wishful thinking. Yes, there were dry areas in 2017, but many were also helped by rains in August. USDA said late Monday that 90% of soybeans were harvested. On the demand side, U.S. soybean exports in 2017-18 are starting lower than a year ago and it is possible that USDA will trim its export estimate. President Trump is visiting China this week and another big sale announcement is expected to accompany his visit, but the amount is likely to stay in the range of what is already expected. The next big key for soybean prices is the success of Brazil's crop and this week's forecast for rain across central Brazil is keeping a lid on Brazil's prices while the U.S. still has the export advantage. Technically, the trend remains up in January soybeans with plenty of uncertainty ahead over the size of Brazil's next crop. DTN's National Soybean Index closed at $9.11 Monday, priced 83 cents below the January contract and down from its highest price in over two months. Thirty-three delivery intentions were reported for November soybeans early Tuesday.

Wheat:

December Chicago wheat closed down 3 1/2 cents Tuesday, taking back Monday's gain and showing again how difficult it is to sustain a rally while wheat supplies are plentiful. Late Monday, USDA said 91% of winter wheat was planted, 75% was emerged and 55% was rated good to excellent. Of course, we don't know what USDA has in mind for the size of the next crop so this early information doesn't mean a lot until next spring. Wheat prices are so cheap that USDA's expected bearish estimates in Thursday's WASDE report are not likely to pressure prices much, but it does create a difficult environment for attracting any buyers, other than commercial bargain hunters. With the Northern Hemisphere about to go into hibernation, winter wheat prices are likely to trade sideways to lower the next several months. DTN's National SRW index closed at $3.95 Monday, priced 36 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.70, also holding stubbornly 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