DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 9.8 million bushels (268,000 mt) of U.S. soybeans were sold to China and 2.3 million bushels (63,000 mt) to unknown destinations, both for 2017-18. Another 2.4 million bushels (66,000 mt) of soybeans were also sold to unknown for 2018-19. Earlier, corn, soybeans, and all three wheats were starting the day a little higher, capturing back part of the week's losses.

Other Markets:

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

Corn:

March corn was up 2 cents early Friday, helped by light commercial buyers responding again to futures prices near their lows for the year. Friday's weather map is mostly dry across the Corn Belt and shows an unusual line of snow from southeastern Texas to Alabama that will disappear later Friday when temperatures warm. In South America, the seven-day forecast remains wet for central Brazil and mostly dry for southern Brazil and Argentina. FOB corn prices are at $4.03 in Brazil, among their highest in two months and showing some concern about the current La Nina pattern while futures prices in the U.S. remain near their lows for the year. Technically, the trend remains down in March corn while cash corn prices have shown gradual improvement since mid-November. DTN's National Corn Index closed at $3.10 Thursday, priced 41 cents below the March contract and down from its highest price in two months. Early Thursday, there were 464 delivery intentions in December corn. In outside markets, the December U.S. dollar index is up 0.03 after the U.S. Labor Department said non-farm payrolls increased 228,000 in November, more than expected. The unemployment rate was unchanged at 4.1%.

Soybeans:

At 8 a.m. CST, USDA announced 9.8 million bushels (268,000 mt) of U.S. soybeans were sold to China and 2.3 million bushels (63,000 mt) to unknown destinations, both for 2017-18. Another 2.4 million bushels (66,000 mt) of soybeans were also sold to unknown for 2018-19. January soybeans were up 2 cents at the 7:45 a.m. break and roughly even on the week, still near its highest prices in four months, but staying in its sideways range while traders continue to monitor South America's weather. The seven-day forecast hasn't show much change this week with rain expected across central Brazil while southern Brazil and Argentina stay drier. The situation remains potentially volatile as La Nina provides the conditions for a more serious drought, but it still not certain and needs more time to prove out. One of the bearish concerns for soybean prices this season is that soybean shipments are down 11% in 2017-18 from a year ago and that is at a time when FOB prices at the U.S. Gulf are 34 cents cheaper than those at Brazil's ports. On the other hand, crush margins based on January futures prices are at their most attractive levels in three years and that should help support prices. Technically, the trend in January soybeans remains sideways with a lot riding on the outcome of South America's next crops. DTN's National Soybean Index closed at $9.19 Thursday, priced 73 cents below the January contract and down from its highest price in four months. Friday's delivery intentions for December contracts totaled 189 for soybean meal and 153 for soybean oil.

Wheat:

March Chicago wheat was up 2 1/4 cents early, a feeble attempt of bargain hunting while prices are still near new contract lows. We do know that commercials are already attracted to the long side of Chicago wheat at these lower prices and I suspect noncommercial traders took on a larger net-short position after Thursday's new low related to Canada's higher crop estimate. Thursday's U.S. Drought Monitor shows dry conditions up and down the western U.S. Plains which may make things more interesting next spring, but is not likely to affect prices in December. Technically, winter wheat futures continue to trend gradually lower while cash wheat prices have kept a more even keel since August. Downside price risk should remain limited at these cheap prices and bouts of short-covering are possible this winter. DTN's National SRW index closed at $3.83 Thursday, priced 39 cents below the March contract and holding above its August low while futures contracts make new lows. Among December contracts, there were 25 delivery intentions for Chicago wheat and 5 for K.C. wheat early Friday. December grain futures expire early on Dec. 14.

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

FollowTodd on Twitter @ToddHultman1

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