Morning CME Globex Update:
Corn, soybean, and wheat prices were mixed through the overnight session and early part of Friday, with soybean contracts attracting the most buying interest. A generally favorable near-term weather forecast for the heart of the Corn Belt may be preventing corn and soybean traders from pursuing a major correction of the recent trade-related losses.
|U.S. Dollar Index:||Lower|
Friday morning has progressed with relatively light volumes of corn futures trade and subsequently quiet price movements. Outside markets are likely to be supportive to grain trade, with the U.S. Dollar Index lower and crude oil rallying on the prospect that OPEC's expected boost in production might not be as large as previously guessed. The monthly Cattle On Feed report to be released Friday afternoon is expected to show fewer animals consuming feed grains. Some of that reduction in demand might have been motivated by the higher corn prices of April and early May, but cattle feeders who are making decisions going forward are now seeing feed prices 14 percent cheaper than last month's high. In the cash corn market, the DTN National Corn Index, an average of cash bids around the country, was $3.28 Thursday, showing the national average basis level at 29 cents under the July futures contract. At 8 a.m. USDA reported 131,300 mt of corn sold to Mexico; 30,000 for 2017-2018 and 101,300 mt for 2018-2019. Also, 117,000 mt of corn were sold to Panama for 2018-2019 delivery.
Soybean futures are higher Friday morning, but haven't pursued any serious upward correction. The new crop November contract has spent most of the past three trading sessions hovering in a 10-cent range above $9.00 per bushel. It will take a few days for flooded soybean fields to drain and then for the plants to demonstrate how much damage they incurred. Despite that damage, the overall impact of recent Midwestern rains will be to improve the crop's yield prospects and reinforce traders' bearish outlooks. Friday is the last trading day for July grain and oilseed options contracts, which may contribute volatility throughout the session. The DTN National Soybean Index was $8.19 Thursday, with old crop basis bids stronger at an average of 61 cents under the July futures contract. The average new crop basis bid collected by DTN Thursday was 72 cents under the November contract ($8.30 per bushel).
Drought conditions have improved over the past ten days, and not a moment too soon for the heading spring wheat crop, although the futures market hasn't expressed any bullish concern about production during the past two weeks of global trade uncertainty. The proportion of the High Plains region in any form of drought fell 3.24 percentage points to 49.15 percent on the most recent U.S. Drought Monitor. The day-to-day direction of wheat futures prices remains under the strong influence of the row crop markets, and September Minneapolis spring wheat futures are lingering almost 90 cents below their late May high. In the cash market for spring wheat, the DTN Spring Wheat Index came to $5.38 Thursday, or 14 cents under the July Minneapolis contract. Cash bids for the new crop of Hard Red Winter Wheat, which is generally a high protein crop this year, remain historically strong for harvest season: an average of only 4 cents under the July KC contract ($4.89). The SRW Index was $4.73 or 22 cents under the July Chicago contract.
Elaine Kubcan be reached at email@example.com
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