DTN Before The Bell Grain Comments

Soybeans a Few Cents Higher

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

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 5.1 million bushels (130,000 mt) of U.S. corn was sold to unknown destinations for 2017-18. January soybeans were up 3 cents early Friday, staying true to their sideways range while traders withhold judgment on South America's next crops. Corn and wheat stayed close to Thursday's closes while outside commodities were mixed.

Other Markets:

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

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Corn:

At 8 a.m. CST, USDA announced 5.1 million bushels (130,000 mt) of U.S. corn was sold to unknown destinations for 2017-18. Earlier, March corn was up a half-cent with a few more days of mild temperatures and mostly dry weather in the Corn Belt before chances for rain and snow show up early next week across the northern and then eastern Corn Belt. As with wheat, March corn's heavy supplies and slow export pace are keeping prices under bearish pressure. Even so, the mid-November low of $3.49 is a later-than-usual candidate for this year's seasonal low with commercials actively willing to own corn here in the mid $3s. Outside of the U.S., Argentina had a few weeks of dry weather, but is expecting rain in the next several days. Technically, the trend in March corn remains down, but downside potential should be limited. DTN's National Corn Index closed at $3.10 Thursday, priced 46 cents below the March contract and near its highest prices in two months. Early Friday, 1,286 delivery intentions were assigned to December corn. In outside markets, both the December U.S. dollar index and February gold are starting quiet, having held roughly sideways the past two months.

Soybeans:

January soybeans were up 3 cents early Friday, holding roughly sideways the past three months with plenty of uncertainty yet about how South America's next round of row crops will go. Both Brazil and Argentina have seen dry stretches of weather at different times. Brazil received beneficial rain in November and both countries have rain expected in this week's forecast. So far, the crop outlook is generally favorable, but this is just the start of the southern equivalent of June so there is plenty of time still to go. FOB soybean prices at Brazil's ports are down to $10.54 on Friday, having eased back from last week's highs with rain in the forecast. Here in the U.S., the trend in January soybeans remains sideways, the export pace is slower than a year ago, and U.S. ending stocks in 2017-18 are estimated by USDA at a comfortable 425 million bushels, provided South America's crops don't run into problems. DTN's National Soybean Index closed at $9.13 Thursday, priced 73 cents below the January contract and near its highest prices in three months. Friday's delivery intentions for December contracts totaled 59 for soybean meal and 279 for soybean oil.

Wheat:

March Chicago wheat was down a quarter-cent early after quiet overnight trading and, at least, is holding above Tuesday's new contract low near $4.24. The pattern the last few months has been that DTN's national index of cash SRW wheat prices posted its low of $3.74 on Aug. 22 and has not been lower since while futures contracts slowly wring out premium and keep gradually sliding to new lows. Unless some unexpected event comes along, that pattern seems likely to continue through winter as domestic supplies are heavy and exports have been dismal. There are early concerns of dry conditions in the southwestern U.S. Plains, but that is not unusual for the region and traders aren't likely to worry about next year's crop yet. For now, March Chicago wheat remains in a gradual downtrend, reinforced by traders' bearish mood. DTN's National SRW index closed at $3.89 Thursday, priced 44 cents below the March contract and holding above its August low while futures contracts make new lows. Among December contracts, there were 1,520 delivery intentions for Chicago wheat, 556 for K.C. wheat, and 323 for Minneapolis wheat early Friday.

Todd Hultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

(BAS)

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