DTN Before The Bell Grain Comments

China's Back For Some Beans

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

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 4.8 million bushels (130,000 mt) of U.S. soybeans were sold to China for 2017-18. Before the announcement, most grain prices were sprinkled lightly red on a quiet Tuesday morning before Thanksgiving.

Other Markets:

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

Corn:

December corn was down 1 1/2 cents early Tuesday, taking back part of Monday's modest gain after USDA said 90% of the corn was harvested, down from the five-year average of 95% for this time of year. Most of the remaining 1.46 billion bushels of corn is standing in the northern and east parts of the Corn Belt, but even those areas should benefit from this week's drier forecast while a couple of days of colder temperatures turn warmer by the end of the week. There seems to be no significant threat to the remaining harvest and so corn prices are heading into winter with the bearish combination of plentiful supplies and a slow export pace. Technically, the trend remains down in December corn, but prices may be ready to flatten out, thanks to active commercial buying. DTN's National Corn Index closed at $3.08 Monday, priced 37 cents below the December contract and up from its lowest price in two months. In outside markets, the December U.S. Dollar Index is up 0.01 while other commodities are mostly higher by small amounts.

Soybeans:

At 8 a.m. CST, USDA announced 4.8 million bushels (130,000 mt) of U.S. soybeans were sold to China for 2017-18. Before the announcement, January soybeans were down 2 cents, staying within their sideways trading range of the past month while traders observe another growing season on South America. This week's forecast continues to expect rain across central Brazil, but is drier for southern Brazil and Argentina. Here in the U.S., USDA said 96% of soybeans were harvested, near their usual pace. Seven states are finished and the remaining 180 million bushels are scattered among areas like Indiana, Michigan, and Missouri with this week's drier weather expected to help. One curious piece of the soybean market is that FOB prices in Brazil are within a dime of their high last July and are 32 cents higher than prices at the U.S. Gulf. The U.S. has not seen much benefit in exports yet, but the stage seems set for increased business. Technically, the trend is sideways in January soybeans with future prices depending on the next South American crop. DTN's National Soybean Index closed at $9.14 Monday, priced 76 cents below the January contract and back up from the lowest price in over a month.

Wheat:

December Chicago wheat was down 3/4 cent early, a quiet start to what is apt to be an uneventful day of trading in this Thanksgiving week. Late Monday, USDA said 88% of winter wheat was emerged, but they won't say 88% of how many acres until Jan. 12. USDA's good-to-excellent rating of 52% dropped DTN's Winter Wheat Condition Index two points to 135, which is still near its five-year average. Past years have shown that these early crop ratings don't carry much weight and it is not the first time the southern Plains have run into drier weather. Traders may pay a little more attention next spring if the dryness persists, but we also have to remember that U.S. wheat production isn't the heavyweight it used to be, accounting for only 6% of the world's production. Technically, Chicago wheat prices are holding sideways, but remain under bearish pressure, finding it difficult to rise above their lowest spot prices in eleven years. DTN's National SRW index closed at $3.90 Monday, priced 32 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

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Todd Hultman