DTN Closing Grain Comments

General Comments:

Corn was up 1/2 cent in the December contract and up 1/4 cent in the July. Soybeans were up 2 1/2 cents in the January contract and up 2 3/4 cents in the July. Wheat closed down 1/2 cent in the December Chicago contract, up 1 cent 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 0.01 at 94.79. December gold is up $7.70 at $1,283.50 while December silver is up 13 cents and December copper is up $0.0095. The Dow Jones Industrial Average is up 3 at 23,560. December crude oil is down $0.44 at $56.76. December heating oil is down $0.0020 while December RBOB gasoline is down $0.0064 and December natural gas is up $0.035.

Corn:

December corn closed up a half-cent at $3.48 1/4 Wednesday, helped by a return of light commercial buying just as prices were once again nearing their lows for 2017. Except for snow in North Dakota, the Midwest was mostly dry Wednesday and is expected to stay that way until the weekend when light rains return to the eastern Midwest. Dow Jones's pre-report survey expects USDA to increase its estimate of U.S. ending corn stocks from 2.34 billion to 2.36 billion bushels, but if the yield is increased, as many suspect, ending stocks would probably go higher as corn exports have also been slow. On the demand side, the U.S. Energy Department said last week's ethanol production stayed close to the same level at 1.057 million barrels per day while ethanol inventory slipped from 21.5 million to 21.3 million barrels. It was a neutral change for the week and the high pace of ethanol production remains an important source of support for corn prices. Here at harvest, it is common for bearish supply factors to be emphasized, but it is also the time of year when seasonal lows are typically made and that seems to be helping corn prices hold sideways. 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, December crude oil is down 44 cents after the Energy Department said crude oil supplies were up 2.2 million barrels last week. December gold is up $7.20.

Soybeans:

January soybeans closed up 2 1/2 cents at $9.98 1/2 on low volume Wednesday as traders continue to wait for Thursday's WASDE report. Dow Jones' survey of analysts expects USDA to lower its estimate of U.S. ending soybean stocks from 430 million to 420 million bushels, but a higher number is possible as early soybean exports have been running below last year's pace. With USDA reporting 90% of soybeans harvested, a surprise on the production side seems unlikely, but the eastern Midwest has had to deal with late-season storms and wet weather. As the U.S. harvest winds down, Brazil is in the Southern Hemisphere's equivalent of early May, and is still expecting broad rain coverage in this week's forecast. Even with the crop-friendly forecast, however, Brazil's FOB soybean price is $10.68, near its highest in three months and 23 cents higher than at the U.S. Gulf. Trading could get volatile the next couple months, depending on how weather treats these early season concerns. Technically, the trend remains up for January soybeans with much riding on the success of Brazil's next crop. 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. One hundred thirty three delivery intentions were reported for November soybeans early Wednesday.

Wheat:

December Chicago wheat finished down a half-cent Wednesday at $4.26 3/4, bouncing back from an 8-cent loss earlier in the day when buyers were difficult to find. The most bullish thing that can be said about Chicago wheat prices is they are cheap enough to attract significant commercial interest and will occasionally catch noncommercial traders having to cover their short positions. Other than that, the big influences are bearish and Thursday's WASDE report will remind us of 960 million bushels of U.S. ending stocks estimated for 2017-18 and record ending wheat stocks for the world. With the Northern Hemisphere heading into winter, it would take some surprise event to produce a significant rally. Until that happens, winter wheat prices are likely to trade roughly sideways, under bearish pressure. In the case of spring wheat, after this year's drought and then three-month correction, December Minneapolis wheat prices appear to be finding support and have turned the trend higher. DTN's National SRW index closed at $3.92 Tuesday, priced 35 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.65, 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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