DTN Closing Grain Comments

Wheat a Little Higher on Quiet Tuesday

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

General Comments:

Corn was unchanged in the December contract and down 1/4 cent in the July. Soybeans were down 1 cent in the January contract and down 1 1/4 cents in the July. Wheat closed up 2 3/4 cents in the December Chicago contract, up 4 1/4 cents in the December Kansas City, and down 1/4 cent in the December Minneapolis contract. The December U.S. dollar index is down 0.15 at 93.85. December gold is up $4.70 at $1,280.00 while December silver is up 9 cents and December copper is up $0.0320. The Dow Jones Industrial Average is up 165 at 23,596. January crude oil is up $0.31 at $56.73. January heating oil is up $0.0015 while January RBOB gasoline is up $0.0233 and January natural gas is down $0.031.

Corn:

December corn finished steady Tuesday, not showing much movement two days before this week's Thanksgiving holiday. Late Monday, USDA said 90% of corn was harvested, down from the five-year average of 95%. Most of the remaining 1.5 billion bushels is standing in the northern and eastern parts of the Corn Belt where conditions have been wetter lately, but this week's drier forecast should help those areas finish with warmer temperatures expected by the end of the week. Fundamentally, the outlook for corn remains bearish with USDA expecting 2.49 billion bushels of ending corn stocks in 2017-18, the accumulated result of five consecutive big U.S. harvests. It is also not helping that corn exports are starting slow as Brazil's lower prices continue to take away U.S. business. Technically, the trend in December corn is down, but probably exhausted after noncommercials put on their largest short position since Oct. 2013. 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, several commodities rebounded from Monday's losses. December gold is up $4.70 and January crude oil is up 31 cents.

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Soybeans:

January soybeans lost a penny Tuesday with traders acting like they have already checked out for the week. USDA said late Monday 96% of soybeans were harvested, near their usual pace with a dry forecast giving a green light for the week ahead. Down south, this week's forecast continues to offer good chances for rain across central Brazil while the forecast for Argentina is drier. Brazil's soybeans should be roughly 80% planted by now and so far, the crop outlook is generally favorable. As mentioned earlier Tuesday, the one curious factor for soybeans is how Brazil's FOB prices are still lingering near their three-month high and are 32 cents higher than at the U.S. Gulf. The U.S. has not seen increased export business yet, but the stage seems set for it. USDA did announce early Tuesday 4.8 million bushels (130,000 mt) of U.S. soybeans were sold to China for 2017-18. Technically, the trend in January soybeans is sideways with plenty of uncertainty still ahead for South America's next crops. 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 closed up 2 3/4 cents, helped by another appearance of light commercial buying just as prices were nearing their lows for 2017. It's not surprising that wheat prices wouldn't move much this holiday week, but actually, prices have stayed within a narrow, 15-cent range all November and show no sign of wanting to leave yet. Tuesday's rumors included talk of radiation detected in the Ural Mountains, but details have not been confirmed, and the potential impact on wheat prices is questionable. Late Monday, USDA said 88% of winter wheat was emerged and 52% of the winter crop was rated good-to-excellent, down from 58% a year ago. It's not unusual that the Southern Plains are dry this time of year and, while wheat supplies are plentiful, traders are in no hurry to own wheat over the winter. The result is that we continue to see spot winter wheat prices languishing near their lowest levels in 11 years and that is likely to continue the next several months. DTN's National SRW index closed at $3.90 Monday, priced 32 cents below the December contract and still holding above its August low. DTN's National HRW index closed at $3.63, still 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