Morning CME Globex Update:
January soybeans were starting the day with a modest bounce after closing Tuesday at a new five-week low. Corn was slightly higher and winter wheats were a couple cents lower, both pinned down by plentiful supplies.
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December corn was up a half-cent early Wednesday, near its lowest prices in 2017. USDA's higher crop estimate of 14.58 billion bushels last Thursday added another bearish hit to prices that were already struggling to find a reason to trade higher. Harvesting the final 2.5 billion bushels has been a challenge with wet weather hampering progress in the eastern Corn Belt. More rain is falling around Illinois early Wednesday, but conditions are expected to turn drier after the weekend. On the demand side, export business remains slow in the U.S. and prices continue to favor Brazil so the pace is not likely to pick up soon. Technically, the trend in corn remains down with commercial buying 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 0.31 while other commodities are mixed. The U.S. Labor Department said consumer prices were up .1% in October and up 2.0% from a year ago, as expected.
January soybeans were up 3 3/4 cents early Wednesday, starting with a modest bounce after dropping to a new five-week low on Tuesday. As with corn, bringing in the final few hundred million bushels of soybeans may be tricky this week with rain still falling in and around the eastern Midwest, but next week's forecast is offering drier, more favorable weather. Given that USDA is expecting a relatively small carry in Brazil this season of 195 million bushels of soybeans, the market is once again in a familiar spot of depending on good weather to keep supplies flowing. This week's forecast shows moderate rain chances for central and southern Brazil while Argentina is drier. Forecast amounts don't always come through however, so we will continue to keep an eye on rainfall totals. Technically, the trend in soybeans turned lower Tuesday, but there is still plenty of uncertainty ahead for 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.
December Chicago wheat was down 2 cents early, sticking to its up-down script in November while prices aren't going anywhere. Wednesday morning's showers in Illinois will be helpful for recently planted SRW wheat while the southwestern U.S. Plains remain drier. Barring some surprise (which can happen), it is difficult to imagine what could significantly change wheat prices this winter as the world's major exporters are all flush with supplies. Technically, the trend in Chicago wheat remains roughly sideways under bearish pressure with occasional bouts of short-covering possible. DTN's National SRW index closed at $3.95 Tuesday, priced 33 cents below the December contract and holding well above its August low.
Todd Hultman can be reached at firstname.lastname@example.org
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