DTN Closing Grain Comments

General Comments:

Corn was up 5 3/4 cents in the September contract and up 6 cents in the December. Soybeans were up 11 cents in the September contract and up 11 cents in the November. Wheat closed up 8 1/4 cents in the September Chicago contract, up 5 cents in the September Kansas City, and up 3 1/2 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.33 at 96.58. December gold is up $2.10 at $1,201.00 while September silver is up 8 cents and September copper is down $0.0440. The Dow Jones Industrial Average is up 133 points at 25,320. September crude oil is down $0.06 at $67.14. September heating oil is down $0.0060 while September RBOB gasoline is up $0.0143 and September natural gas is up 0.029.

Corn:

December corn closed up 6 cents on lighter volume at $3.76 1/2 Tuesday as market bears disappeared in the face of buying strength in soybean meal. While USDA's 14.59 billion bushel (bb) crop estimate is large and includes a record yield of 178.4 bushels per acre (bpa), it is still 394 million bushels (mb) short of USDA's U.S. demand estimate, thanks to a projected 3% increase in world demand in 2018-19. The next 10 days look favorable for row crops with a broad coverage of rain expected over most of the central U.S. along with moderate temperatures offering little or no stress. According to USDA, 26% of corn is already dented, which suggests harvest will come earlier than usual this year. Thanks to expectations for lower ending corn supplies in 2018-19, new-crop export sales are up 54% from a year ago. With a possible early harvest plus increased export sales, it will be interesting to see if the seasonal low comes before the usual time of early October. For now, the trend in December corn is sideways. DTN's National Corn Index closed at $3.25 Monday, still above its low in 2018 and 31 cents below the September contract. In outside markets, most other commodities are higher, even though the September U.S. dollar index is up 0.33.

Soybeans:

November soybeans closed up 11 cents at $8.79 3/4 Tuesday, helped by commercial buying in soybean meal that sent the December meal contract up $9.00 to its highest close in August. As mentioned often the past several weeks, this is a volatile time for soybean prices, given crop sensitivity to weather and the ongoing trade dispute with China. Tuesday's forecast looks favorable for soybean crops with a broad coverage of rain and moderate temperatures expected. The heaviest amounts are targeted for southwestern Missouri and northeastern Oklahoma where drought has been common this year. There is no progress on the trade front to report, but various reports suggest officials from China and the U.S. are still talking and we are getting closer to the October-to-February window when China is more apt to buy U.S. soybeans. It is odd that in spite of this year's record soybean crop estimate from USDA, U.S. new-crop soybean sales are already up 55% from a year ago, but China is famous for cancelling earlier sales, just as they did in 2018. In spite of Friday's big drop, the trend in November soybeans remains sideways in a dangerously volatile market environment. DTN's National Soybean Index closed at $7.88 Monday, back near its lowest price in over nine years and priced 81 cents below the November contract. August contracts in the soy complex expired early Tuesday.

Wheat:

September Chicago wheat closed up 8 1/4 cents at $5.41 3/4 Tuesday, a day of quieter trading after three consecutive losses. Late Monday, USDA said 94% of winter wheat was harvested and now traders are already looking ahead to the next planting. Except for Texas, winter wheat areas are expecting generous rains the next seven days. Temperatures in the southwestern Plains will still be hot, but less extreme. It also helped Tuesday's wheat prices that December milling wheat in Europe closed up 1 1/4 euros or 0.6% higher. The forecast for the northwestern U.S. and western Canadian Prairie shows some light rain amounts expected, but will still be mostly dry after USDA said late Monday that 65% is still awaiting harvest. In the near term, wheat prices have been volatile and sensitive to weather changes, but in a larger perspective, we see prices chopping gradually higher since the fall of 2016 with USDA expecting the world's lowest amount of exportable ending wheat stocks in 11 years. In spite of recent losses, the trends for all three U.S. wheats remain up. DTN's National SRW index closed at $5.06 Monday, 27 cents below the September contract and down from its high in 2018. DTN's National HRW index closed at $5.21 Monday, also down from its highest price in 2018.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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