Morning CME Globex Update:
Corn and all three wheats were starting a little lower Wednesday with another quiet day of trading expected ahead of Thursday's WASDE report. January soybeans were a couple cents higher and outside commodities were mixed.
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December corn was down a penny early Wednesday with three days of dry weather expected across the Midwest before light rain amounts return to the eastern Midwest this weekend. It's not a difficult prediction to make given how corn has gone nowhere the past two months, but Wednesday's trading will likely stay quiet, ahead of Thursday's WASDE report where many are expecting USDA to put out a slightly higher yield estimate. If there is no bearish surprise, corn prices should be able to keep holding steady, thanks to commercial support at these cheap prices. Once again, this is the time of year when seasonal lows are typically made, but so far, prices have found no lift as potential buyers have avoided this year's big harvest and slow export pace. Technically, the trend remains sideways in December corn. DTN's National Corn Index closed at $3.07 Tuesday, priced 41 cents below the December contract and is still holding above its August low. In outside markets, other commodities are mixed with December gold up $5.90 and December crude oil down 19 cents.
January soybeans were up 2 cents early Wednesday, nudging close to the $10 mark while producers try to take advantage of this week's drier weather where fields can be harvested. Light rains are expected to return to the eastern Midwest this weekend, but the extended forecast is helping the harvest effort with a drier forecast. In central Brazil, some beneficial rain has come through, but more is needed and more continues to be expected in the seven-day forecast. Here in the southern equivalent of early May, FOB soybean prices in Brazil translate to $10.66 a bushel which is near their highest in three months and 24 cents above prices at the U.S. Gulf. These higher prices reflect early concerns about Brazil's next crop, but as we all know, early season concerns can come or go quickly and it all depends on weather so expect to see price volatility the next couple months. On the demand side, China remains as interested in soybeans as ever. Dow Jones reported that China's soybean imports were up 15% in the first ten months of 2017 from a year ago. For now, the trend in January soybeans remains up. DTN's National Soybean Index closed at $9.13 Tuesday, priced 83 cents below the January contract and down from its highest price in over two months. 133 delivery intentions were reported for November soybeans early Wednesday.
December Chicago wheat was down 3 cents early, staying in the low $4s with prices finding no reason to push very far in either direction. Once again, wheat is looking at plentiful U.S. and world inventories which will be repeated in Thursday's WASDE report. On the other hand, prices have gotten so cheap that commercials have staked out a significant holding of net longs, showing wheat's attractive value at this level. USDA's estimate of this fall's winter wheat acres won't come out until Jan. 12 and USDA said Monday that early crop ratings are a little lower than a year ago, but we can't identify any serious problems for next spring's crop yet. Technically, the trend in winter wheat remains roughly sideways, under bearish pressure. DTN's National SRW index closed at $3.92 Tuesday, priced 35 cents below the December contract and holding above its August low.
Todd Hultman can be reached at email@example.com
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