DTN Before The Bell Grain Comments

Grains Up Slightly Ahead Of USDA Report

Todd Hultman
By  Todd Hultman , DTN Grains Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

Most grain contracts were slightly higher early Thursday in anticipation of USDA's next WASDE report, due out at 11 a.m. CST. One exception was December Minneapolis wheat, trading up 11 cents and threatening to add to its string of higher closes in November.

Other Markets:

Dow Jones: Lower
U.S. Dollar Index: Lower
Gold: Higher
Crude Oil: Higher

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Corn:

December corn was up a half-cent early Thursday, still holding within its same narrow, sideways range of the past two months while USDA gets ready to release its latest monthly estimates at 11 a.m. CST. The bearish concerns for corn are that many are expecting another increase in USDA's corn yield estimate and exports could be reduced as the early pace has been slow. On the other hand, if the yield estimate does not change much, prices could experience some bullish relief and may finally be able to see an easing of harvest pressure that typically happens at this time of year. Early Thursday, USDA said last week's export sales and shipments of corn totaled 93.1 and 19.3 million bushels respectively, a bearish combination for the week in spite of a sales boost from Mexico. Total corn shipments are down 42% in 2017-18 from a year ago. For now, December corn remains in a sideways trend with commercial support at the lower end of the range. DTN's National Corn Index closed at $3.08 Wednesday, priced 40 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 European Union raised its estimate of GDP growth from 1.7% to 2.2% for 2017.

Soybeans:

January soybeans were up 1 1/2 cents early Thursday, near its highest prices in a month and not showing much concern about USDA's new estimates, coming out later Thursday morning. Increasing attention is being directed to central Brazil where there is still rain in this week's forecast, but actual amounts have been light. Reflecting early concerns, FOB soybean prices at Brazil's ports are at $10.70 a bushel, their highest in over three months and 23 cents above prices at the U.S. Gulf. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 42.6 and 92.6 million bushels respectively, a bearish combination for the week that has total shipments down 8% in 2017-18 from a year ago. During President Trump's visit to China, Chinese importers signed letters of intent to buy 12 million metric tons of U.S. soybeans in 2017-18. The news did not necessarily represent new or unexpected business, but provided more evidence of China's growing appetite for soybeans. So far, the trend remains up in January soybeans with plenty of weather uncertainty in play for Brazil's crops down south. DTN's National Soybean Index closed at $9.16 Wednesday, priced 82 cents below the January contract and down from its highest price in over two months. 133 delivery intentions were reported for November soybeans early Thursday.

Wheat:

December Chicago wheat was up a half-cent early, staying roughly sideways like corn with no big surprises expected in Thursday's WASDE report. Most likely, USDA will tell us once again that both, the U.S. and the world have plenty of excess supplies of wheat in 2017-18 and, because that bearish scenario is so well known by now, prices probably won't show much reaction. Thanks to all those supplies of world wheat, U.S. exports remain slow. USDA said last week's export sales and shipments of wheat totaled 28.7 and 10.9 million bushels respectively, a marketing year high for sales, but still a bearish combination for the week. Total wheat shipments in 2017-18 are down 6% from a year ago. Here in the U.S., another winter wheat crop is being planted, but USDA won't have an acreage estimate until Jan. 12. The early crop rating is a little lower than a year ago, but good enough to withhold judgment until the spring. Winter wheat prices remain under bearish pressure and are likely to continue their sideways course this winter. DTN's National SRW index closed at $3.92 Wednesday, priced 35 cents below the December contract and 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