Morning CME Globex Update:
Grains were starting the week lower with the exception of a slight gain in January soybeans. March soybean oil is down 0.10 after March palm oil fell 1.4% early Monday to its lowest close in over three months.
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March corn was down 1 1/4 cents early Monday after a weekend of mostly dry weather and warm temperatures, helping the late harvest effort. USDA's final Crop Progress report of 2017 will update corn harvest progress later Monday afternoon and should find fields 95% picked or more. CFTC's Commitments of Traders report will also be interesting to check in on later Monday as noncommercial traders were last seen holding their largest short position in four years. With U.S. corn supplies abundant and harvest nearly over, attention turns to South America where conditions in Brazil are generally favorable, but Argentina has been drier of late. Given this year's record yields in the U.S., traders in general are going to be reluctant to buy on any weather concerns. December corn remains in a downtrend with active commercial support at these lower prices. DTN's National Corn Index closed at $3.06 Friday, priced 36 cents below the December contract and down from its highest prices in two months. In outside markets, other commodities are mostly lower, but December gold is up $10.90 and RTTNews.com reports Bitcoin above $9,700.
January soybeans were up a quarter-cent early Monday, starting the week quietly within their sideways range. For all practical purposes, the U.S. soybean harvest is now over, but for any fields still not finished, this week's forecast remains mostly dry with unseasonably warm temperatures over much of the Midwest. In South America, Brazil's crops should be doing well overall and have more rain expected in this week's forecast. Argentina on the other hand, shows another mostly dry forecast for the week ahead and remains a potential concern. I noted Friday how Brazil's FOB soybean price was unusually high at $10.75, its highest in over three months. Monday morning, that price dropped to $10.58 and is now 18 cents above the U.S. Gulf. Technically, the trend in January soybeans remains sideways with the October high of $10.13 offering resistance. DTN's National Soybean Index closed at $9.18 Friday, priced 75 cents below the January contract and near its highest prices in three months.
March Chicago wheat was down 3 1/2 cents early, exploring new contract lows at a time when commercials remain the only source of buying interest. I'm obliged to point out that the seven-day forecast remains mostly dry across the southern Plains and Monday's warmer temperatures will contribute to red flag warnings in the region. If that kind of pattern continues over the winter, it may become a problem next spring, but it is far too early for noncommercial traders to respond to news like that. Overall, winter wheat prices remain under bearish pressure from plentiful global supplies and low U.S. exports. Winter wheat is finding it difficult to hold support at this time, but a roughly sideways trend is still likely through winter, somewhere in the low $4s. DTN's National SRW index closed at $3.84 Friday, priced 32 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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