DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CST, USDA announced 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to unknown destinations for 2017-18. 4.3 million bushels of U.S. corn (110,000 mt) were sold to Mexico for 2017-18.
Grains are starting the week in the red with January soybeans down a nickel at the morning break and March Chicago wheat down 3 1/4 cents.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 4.3 million bushels of U.S. corn (110,000 mt) were sold to Mexico for 2017-18. At the morning break, March corn was down 1 3/4 cents, staying close to its 2017 low while noncommercial traders keep a bearish view of the grain. Friday's CFTC report showed noncommercials turned less bearish in corn, reducing net shorts from 91,852 to 53,708 as of Dec. 5. Commercials took advantage of corn's brief three-day rally and trimmed net longs to 48,055. The fact that commercials are still net long continues to suggest that corn prices should be near support and farmer selling is likely to be limited now that harvest is over. Monday's forecast expects snow in the northern Midwest and the rest of the region is expected to be mostly dry this week. Technically, the trend in March corn is still down, but downside risk should be limited. DTN's National Corn Index closed at $3.12 Friday, priced 41 cents below the March contract and down from its highest price in two months. Early Monday, there were 39 delivery intentions in December corn. In outside markets, the December U.S. dollar index is down 0.04 and other commodities are mixed.

Soybeans:

At 8 a.m. CST, USDA announced 4.85 million bushels (132,000 mt) of U.S. soybeans were sold to unknown destinations for 2017-18. Earlier, January soybeans were down a nickel with more rain falling across central Brazil while southern Brazil and Argentina are expected to stay drier this week. January soybean meal is also trading lower, down $3.90 and threatening a fourth consecutive lower close after making new four-month highs last week. Friday's CFTC report showed noncommercials increased net longs in soybeans from 62,873 to 92,585 on Dec. 5, just when prices were challenging their four-month high and setting up what now looks like a bullish trap. The main determinant of future prices of course is South America's weather and so far, crops in southern Brazil and Argentina could still use more rain. Technically, the trend in January soybeans remains sideways with important support at the November low of $9.67. DTN's National Soybean Index closed at $9.17 Friday, priced 73 cents below the January contract and down from its highest price in four months. Monday's delivery intentions for December contracts totaled 192 for soybean meal and 121 for soybean oil.

Wheat:

March Chicago wheat was down 3 1/4 cents early, starting the week with another new contract low right out of the chute. Friday's CFTC report showed noncommercials a little less bearish in Chicago wheat on Dec. 5 as net shorts were trimmed from 82,289 to 74,071. Commercial net longs were reduced to 77,044, but remain wheat's primary source of support. Wheat's current slump started on Dec. 6 when Statistics Canada increased its all wheat crop estimate to 30.0 mmt and it is likely that noncommercials have added to short positions since then. Fundamentally speaking, there is not much happening for wheat at this time of year. Futures prices continue to trend gradually lower while cash wheat prices test their lowest prices in three months. DTN's National SRW index closed at $3.80 Friday, priced 39 cents below the March contract and holding above its August low while futures contracts make new lows. Among December contracts, there were 285 delivery intentions for Chicago wheat and none for K.C. or Minneapolis wheat early Monday. 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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