Morning CME Globex Update:
At 8 a.m. CST, USDA announced 6.4 million bushels (162,000 mt) of U.S. grain sorghum were sold to China for 2017-18. Earlier, January soybeans were up 6 1/4 cents, nearing the upper end of their sideways range while dry weather remains a concern in Argentina. Corn was slightly higher and winter wheat mixed, both staying near their lows in 2017.
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March corn was up 1 cent early Tuesday, still slugging it out near its lowest spot prices in eleven years with traders avoiding the long side of corn while U.S. supplies are plentiful. While corn's fundamental outlook remains bearish on the surface, there is some encouragement that 83,304 commercial net longs believe corn is offering good value at these lower prices. Also, DTN's national index of cash corn prices is up 16 cents from its August low and is among its highest prices in over two months -- a healthier sign that cash corn is moving even though the export pace has been slow. Technically, March corn has held sideways since mid-November and the November low may stand as the low for 2017 while heavily bearish traders are vulnerable to short-covering. DTN's National Corn Index closed at $3.11 Monday, priced 43 cents below the March contract and down from its highest price in two months. Early Tuesday, 1,122 delivery intentions were assigned to December corn. At 8 a.m. CST, USDA announced 6.4 million bushels (162,000 mt) of U.S. grain sorghum were sold to China for 2017-18. In outside markets, the December U.S. dollar index is up 0.13 and other commodities are mostly lower.
January soybeans were up 6 1/4 cents early Tuesday, holding near the upper end of its sideways range while traders continue to monitor events in South America. The latest seven-day forecast expects moderate rain amounts across central Brazil, mostly light amounts for southern Brazil, and mostly dry conditions for Argentina where La Nina's drier influence has become a concern. Clearly, the situation deserves monitoring and could become serious, but traders also have a history of being burned by reacting to early season concerns so the current cautious wait-and-see response is understandable. The more bullish response is being seen in January soybean meal where prices are up $2.50 early Tuesday after posting a new four-month high on Monday. The higher meal price will help crush demand and is helping keep January soybeans supported in their sideways range, below resistance at the October high of $10.13. DTN's National Soybean Index closed at $9.25 Monday, priced 73 cents below the January contract and at its highest price in four months. Tuesday's delivery intentions for December contracts totaled 257 for soybean meal and 329 for soybean oil.
March Chicago wheat was down 1/4 cent early Tuesday, trading roughly a dime above its low for the year, but going nowhere fast while the Northern Hemisphere heads into winter. As everyone knows by now, 2017 was another big year for world wheat production with USDA estimating global ending wheat stocks at a record high 9.8 billion bushels (268 mmt). U.S. ending wheat stocks are also large at 935 million bushels or 44% of annual use. USDA is also estimating a billion bushels of U.S. wheat exports, but that may be difficult to achieve with so much competition around. As bearish as all that sounds, no one knows what surprises lie ahead and, as discussed in Tuesday DTN article, "HRW Wheat Biding Time", the market exerts a balancing influence over the long-run which often goes unnoticed. For now, the trend in winter wheat remains steady to lower with noncommercial traders stuck in a bearish mood. DTN's National SRW index closed at $3.94 Monday, priced 41 cents below the March contract and holding above its August low while futures contracts make new lows. Among December contracts, there were 247 delivery intentions for Chicago wheat and12 for K.C. wheat early Tuesday.
Todd Hultmancan be reached at firstname.lastname@example.org
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