DTN Before The Bell Grain Comments

Morning CME Globex Update:

'Twas the morning before WASDE and all across the Board, not a grain was stirring, but USDA's export sales announcements might wake some traders up. At 8 a.m. CST, USDA announced 6.0 million bushels (152,000 mt) of U.S. corn were sold to Mexico for 2017-18. 18.1 million bushels (492,000 mt) of U.S. soybeans were switched from unknown to China and a new 6.2 million bushels (168,300 mt) were sold to unknown, both for 2017-18. Even 4.4 million bushels (120,000 mt) of HRW wheat were sold to Algeria for 2017-18.

Other Markets:

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

Corn:

At 8 a.m. CST, USDA announced 6.0 million bushels (152,000 mt) of U.S. corn were sold to Mexico for 2017-18. March corn was up 3/4 cent earlier, resisting new lows before USDA releases its December WASDE report at 11 a.m. CST. Tuesday's weather map shows snow in the eastern Midwest and northeastern U.S. where colder temperatures will be camping out all week while the southwestern U.S. Plains stay warm. Most of the Corn Belt will be dry this week, favorable for transporting grain if prices weren't so depressed. Thanks to this season's slow export pace, USDA may raise its estimate of U.S. ending corn stocks a small amount and traders will be watching for changes in South America's crop estimates. It is still early however and the January WASDE report will likely have more price impact. For now, March corn remains in a downtrend with commercials actively interested in corn at these lower prices. DTN's National Corn Index closed at $3.09 Monday, priced 40 cents below the March contract and down from its highest price in two months. Early Tuesday, there were 66 delivery intentions in December corn. In outside markets, the December U.S. dollar index is trading up 0.10 after the U.S. Labor Department said producer prices were up 0.4% in November and up 3.1% from a year ago, slightly more than expected. The Federal Reserve begins its final two-day meeting of 2017 and is expected to raise the federal funds rate on Wednesday.

Soybeans:

At 8 a.m. CST, USDA announced 18.1 million bushels (492,000 mt) of U.S. soybeans were switched from unknown to China and a new 6.2 million bushels (168,300 mt) were sold to unknown, both for 2017-18. January soybeans were down 1 3/4 cents earlier, sagging lower in front of Tuesday's WASDE report while rain continues to fall across central Brazil. The seven-day forecast for southern Brazil is mostly dry, but light to moderate showers are expected to provide timely help for crops in Argentina. Like corn, USDA may increase its estimate of U.S. ending soybean stocks due to the slow pace of soybean exports. Brazil's soybean crop estimate will also be watched and may see a small increase after last month's beneficial rains. Dry conditions continue to be a concern in southern Brazil and Argentina, but so far, January soybeans are staying in their sideways range as traders are finding no strong bullish arguments to prop up their long positions. A close below the November low of $9.67, if it happened, would turn the trend bearish. DTN's National Soybean Index closed at $9.10 Monday, priced 72 cents below the January contract and down from its highest price in four months. Tuesday's delivery intentions for December contracts totaled 169 for soybean meal and 72 for soybean oil.

Wheat:

At 8 a.m. CST, USDA announced 4.4 million bushels (120,000 mt) of HRW wheat were sold to Algeria for 2017-18. March Chicago wheat was up 3/4 cent at the morning break, looking for support after closing at four consecutive new contract lows. Clearly these are bearish times for wheat with spot prices near their lowest levels in eleven years and USDA estimating record high world ending wheat stocks for 2017-18. That estimate may come down a little in Tuesday's WASDE report, but is likely to go back up when USDA factors in Canada's higher crop estimate and may even result in record wheat production in 2017. Here in the U.S. where only 6% of the world's wheat is grown, this week's forecast remains mostly dry for the western Plains with warm temperatures in the South. For now, the trend remains down in winter wheat. Even at these cheap prices, the risk continues to be that noncommercials are finding no reason to buy wheat. DTN's National SRW index closed at $3.74 Monday, priced 39 cents below the March contract and near its August low while futures contracts make new lows. Among December contracts, there were 15 delivery intentions for Chicago wheat, 29 for K.C. wheat, and 83 for 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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