DTN Early Word Grains
Soybeans Rebound as Grains Push Higher
December corn was up 2 cents, November soybeans were up 9 1/4 cents, and September Chicago wheat was up 10 3/4 cents.
CME Globex Recap:After nearing its lowest prices in over two years amid trade war pressures, China's stock market is trading higher early Tuesday, leading the world's other stock markets with a 2.7% gain. Most commodities, including grains are trading higher.
OUTSIDE MARKETS:Previous closes on Monday showed the Dow Jones Industrial Average up 39.60 points at 25,502.18 and the S&P 500 up 10.05 points at 2,850.40 while the 10-year Treasury yield ended at 2.94%. Early Tuesday, DJIA futures were up 82 points. Asian markets are higher with Japan's Nikkei 225 up 155.42 (0.7%) and China's Shanghai Composite up 74.22 (2.7%). European markets are also higher with London's FTSE 100 up 51.89 points (0.7%), Germany's DAX up 109.66 points (0.9%), and France's CAC 40 up 42.85 points (0.8%). The euro was up .0035 and the U.S. dollar index was down 0.26 at 95.10. September 30-year T-Bonds were down 6/32nds while December gold was up $5.80 at $1,223.50 and September crude oil was up $0.41 at $69.42. Soybeans on China's Dalian Exchange were higher and Malaysian palm oil futures were up 1.3%.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Not much rain in the seven-day forecast for the central and northern Midwest with hotter temperatures on the way. California wildfires are adding to the general mood of dry weather concerns. | 1) | The central Corn Belt received beneficial rains overnight, but the Eastern Corn Belt and Southern Plains are expecting rain in the next seven days. |
| 2) | IGC and USDA both estimate significant reductions in exportable world ending stocks of corn and wheat in 2018-19. | 2) | Monday afternoon's USDA good-to-excellent ratings for corn and soybeans are the third highest of the past five years, but that won't matter after USDA releases Friday's yield estimates. |
| 3) | USDA is likely to reduce its estimate of 2018-19 world wheat production in Friday's WASDE report. | 3) | China's 25% soybean tariff and ongoing trade war show no sign of a change in direction yet. |
CORN December corn is up 2 cents early Tuesday, continuing to find support from rising wheat prices and some concerns in the latest seven-day forecast. The Midwest actually saw broad coverage of light-to-moderate showers overnight from Nebraska and South Dakota to Indiana, which is beneficial to crops at a time when rain has been less available. The seven-day forecast has the best rain chances for the eastern Midwest and southern Plains with heavy amounts on the way to northern Texas and Arkansas. Actual amounts have gone off script lately so it has been important to stay attentive to nature's surprises. Temperatures are expected to stay moderate in the eastern Midwest, but will turn hotter in the west by Thursday. USDA's latest Crop Progress report shows a crop developing faster than usual with 57% in the dough stage. Crops are also rated well overall, but there is plenty of uncertainty in the yield guess that USDA will post on Friday. Technically, the downtrend in December corn has been broken and prices appear to have found a more balanced level for a new trading range while traders try to figure out the size of this year's crop.
SOYBEANS November soybeans are up 9 1/4 cents early, erasing Monday's loss with help from a lower crop rating from USDA. Late Monday, USDA said 75% of soybeans were setting pods, compared to a five-year average of 58% at this time of year. Sixty-seven percent of the crop was rated good-to-excellent, down from 70% a week ago with Missouri still showing the highest percentage in the poor-to-very-poor category. As mentioned above, much of the Midwest benefited from light-to-moderate showers overnight, but the best chances ahead are for the eastern Midwest and Southern Plains. Trading is likely to be on the cautious side this week, ahead of USDA's first yield estimate from the field. We also have to mention that lack of trade with China remains a bearish concern in 2018 with no sign yet of change in sight. Technically, the downtrend in soybeans has been broken, but predicting a future direction is a tough call during this potentially volatile time of year. Weather plus trade policy decisions are giving soybean prices wide potential in either direction.
WHEAT September Chicago wheat is up 10 3/4 cents early Tuesday, showing no sign of backing down as it pushes above its old 2017 high with encouragement from Europe's milling wheat price as it is trading up over 3 euros or 1.5%. Dry weather remains a concern in nearly every major wheat region this year, a situation that started slowly in 2018 and turned more serious of late as Europe's problems became more well-known. Here in the U.S., a spring wheat crop that was rated 80% good-to-excellent a month ago is now down to 74% good-to-excellent with a dry seven-day forecast and hot temperatures headed to the northwestern Plains and western Canadian Prairies. It also does not help that the Pacific Northwest is experiencing increasing drought and Marketwatch.com reported the wildfire in northern California is now the largest in state history, covering 284,000 acres. With weather risk still active in several locations around the globe and USDA set to give new-crop estimates on Friday, the trends for all three wheats remain up.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.40 | $0.02 | -$0.31 | Sep | $0.004 |
| Soybeans: | $8.14 | -$0.09 | -$0.79 | Nov | $0.000 |
| SRW Wheat: | $5.44 | $0.15 | -$0.30 | Sep | -$0.033 |
| HRW Wheat: | $5.67 | $0.19 | -$0.19 | Sep | -$0.001 |
| HRS Wheat: | $5.83 | $0.16 | -$0.46 | Sep | $0.003 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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