DTN Before The Bell Grain Comments

Grains Slightly Higher; Export Pace Bearish

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

Morning CME Globex Update:

December corn and all three wheats were starting a little higher early Thursday while January soybeans stayed unchanged. USDA's weekly report showed total 2017-18 shipments in corn, soybeans, and wheat all lower than a year ago.

Other Markets:

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

Corn:

December corn was up a quarter-cent early Thursday, adapting to this week's new lows with little argument among traders. Thursday's weather map is mostly dry for remaining harvest, but the eastern Corn Belt then has two more days of wet weather before conditions turn drier again next week. This year's slower harvest pace has not been a significant problem for corn as the market has been much more focused on the 14.58 billion bushels of new supplies that USDA estimates. Adding to corn's bearish woes, exports continue be slow. Early Thursday, USDA said last week's export sales and shipments of corn totaled 37.4 and 16.4 million bushels respectively, a bearish combination for the week that put total corn shipments down 41% in 2017-18 from a year ago. Technically, the trend in December corn remains down, but commercials are finding attractive value at these cheap prices. DTN's National Corn Index closed at $3.00 Wednesday, priced 38 cents below the December contract and near its lowest price since Aug. 30. In outside markets, the December U.S. dollar index is trading up 0.07 after the U.S. Labor Department said jobless claims jumped up to 249,000, reported RTTNews.com.

Soybeans:

January soybeans were unchanged early, in line with this week's more bearish tone. USDA is expecting 2017-18 to end with its most comfortable margin of surplus in eleven years, nearly 10% of annual use here in the U.S. So far, that is keeping prices under bearish pressure, but much of USDA's expected surplus for the U.S. depends on Brazil coming through with another big crop and that has yet to be determined as roughly two-thirds of the crop has just been planted. The latest forecast for the week ahead expects broad rain coverage for Brazil's growing areas while Argentina will be drier. FOB soybean prices at Brazil's ports are 35 cents higher than at the U.S. Gulf, but so far, the pace of U.S. soybean exports has been disappointing. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 40.6 and 82.9 million bushels respectively, bearish amounts that have total soybean shipments down 11% in 2017-18 from a year ago. Technically, the trend in January soybeans turned lower this week, but weather through the new growing season continues to be the prominent factor for prices. DTN's National Soybean Index closed at $8.98 Wednesday, priced 78 cents below the January contract and near the lowest price in over a month.

Wheat:

December Chicago wheat was up 2 1/4 cents Thursday, with early commercial buying helping prices stay true to their narrow sideways range in November. Chicago wheat continues to languish at its lowest spot prices in eleven years, weighed down by plentiful supplies as the northern Hemisphere heads into another winter. The lion's share of this season's export business is expected to go to Russia and Europe and so far, that looks to be true. Early Thursday, USDA said last week's export sales and shipments of U.S. wheat totaled 18.0 and 10.9 million bushels respectively, bearish amounts that are not making a dent in USDA's large ending stocks estimate. While most of the U.S. is turning noticeably cooler, the Texas Panhandle will be in the 80s on Friday and then turn cooler over the weekend. Technically, the trend in winter wheat is roughly sideways, under ongoing bearish pressure. DTN's National SRW index closed at $3.86 Wednesday, priced 34 cents below the December contract and holding well above its August low.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BAS)

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Todd Hultman