DTN Closing Grain Comments

Soybeans Rebound and Wheat Tumbles

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

General Comments:

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

The December U.S. dollar index is down 0.03 at 93.69. December gold is down $5.10 at $1,277.80 while December silver is down 11 cents and December copper is down $0.0160. The Dow Jones Industrial Average is down 130 at 23,280. December crude oil is down $0.45 at $55.25. December heating oil is up $0.0018 while December RBOB gasoline is down $0.0214 and December natural gas is down $0.033.

Corn:

December corn ended up 3/4 cent on light volume Wednesday, staying close to Tuesday's new contract low with little response from the market. Wednesday's weather map saw another line of showers move through the eastern Midwest, adding to annoying harvest delays. The rest of the Corn Belt will be mostly dry this week and even the Eastern Corn Belt is expected to get a break from wet weather next week, so there will be more chances for harvest to keep advancing. Earlier Wednesday, the U.S. Energy Department said ethanol production held roughly steady last week at 1.054 million barrels per day while ethanol inventory increased from 21.3 to 21.5 million barrels. Corn prices have not shown much appreciation for the ethanol market lately, but it is important to keep in mind that last week's production pace, if extended, accounts for 40% of this fall's expected harvest. Technically, the trend remains down in December corn with commercials providing the only source of support for prices. DTN's National Corn Index closed at $2.99 Tuesday, priced 39 cents below the December contract and the lowest close since its Aug. 30 low. In outside markets, the December U.S. dollar index is down 0.03 while December gold is down over $5.00. The U.S. Labor Department said consumer prices were up .1% in October and up 2.0% from a year ago, as expected.

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Soybeans:

January soybeans rebounded 8 1/2 cents to $9.76 1/4 on light volume from Tuesday's sell-off, helped by commercial buying in both soybean meal and oil. According to Dow Jones, the National Oilseeds Processors Association (NOPA) estimated 164.2 million bushels of soybeans were crushed in October, more than expected, but down slightly from a year ago. U.S. soybean oil stocks ended the month at 1.224 billion pounds, much less than expected and down 9% from a year ago. December soybean oil closed up 0.74, boosted by NOPA's news. This continues to be a volatile time for soybean prices while soybeans are being planted in Brazil. Wednesday's weather map for central Brazil was mostly dry, but this week's forecast is still expecting broad rain coverage over Brazil's growing areas while Argentina is drier. FOB soybean prices at Brazil's ports have pulled back from three-month highs to $10.56 and are 35 cents higher than prices at the U.S. Gulf. Technically, the trend in January soybeans turned lower Tuesday, but there is plenty of uncertainty left concerning Brazil's next crop. DTN's National Soybean Index closed at $8.89 Tuesday, priced 79 cents below the January contract and the lowest price in over a month.

Wheat:

December Chicago wheat fell 8 cents to $4.20 on light volume with ongoing pressure from plentiful supplies, here in the U.S. and around the world. As bearish as the day looked for wheat, prices are still staying within a narrow sideways range in November, close to their lows for the year. This kind of choppy trade that goes mostly sideways is likely to become a familiar pattern this winter as the Northern Hemisphere gets ready to hibernate. Unless some surprise erupts, we are likely to see noncommercials stay mostly short, interrupted by occasional bouts of short-covering while commercials ride the waves, buying on dips and letting go on rallies. Rain fell on a young SRW wheat crop in the eastern Midwest Wednesday while conditions are expected to stay mostly dry in the southwestern Plains. Technically, the trend in winter wheat remains roughly sideways and is also under bearish pressure. DTN's National SRW index closed at $3.95 Tuesday, priced 33 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.72, also holding stubbornly above its August low.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman