DTN Early Word Grains
Soybeans Higher Ahead of Trade Talks
December corn was up 1/4 cent, November soybeans were up 10 1/4 cents, and December K.C. wheat was down 2 1/4 cents.
CME Globex Recap:Dow Jones futures are modestly higher, along with Europe's stocks early Monday. December gold is up $10.60 and October crude oil is down 2 cents after Venezuela devalued its currency by roughly 95% on Friday. Other than wheat and energies, most commodities are higher early Monday with soybeans' higher prices likely influenced by this week's trade talks between the U.S. and China.
OUTSIDE MARKETS:Previous closes on Friday showed the Dow Jones Industrial Average up 110.59 points at 25,669.32 and the S&P 500 up 9.44 points at 2,850.13 while the 10-year Treasury yield ended at 2.87%. Early Monday, DJIA futures were up 69 points. Asian markets are mixed with Japan's Nikkei 225 down 71.38 (-0.3%) and China's Shanghai Composite up 29.50 (1.1%). European markets are higher with London's FTSE 100 up 40.56 points (0.5%), Germany's DAX up 126.08 points (1.0%), and France's CAC 40 up 36.98 points (0.7%). The euro was down .0036 and the U.S. dollar index was up 0.18 at 96.31. September 30-year T-Bonds were up 10/32nds while December gold was up $10.60 at $1,194.80 and October crude oil was down $0.02 at $65.19. Soybeans on China's Dalian Exchange were lower and Malaysian palm oil futures were up 0.9%.
| BULL | BEAR | ||
| 1) | November soybeans are back near $9.00 with trading still volatile in August. | 1) | USDA estimated a record U.S. soybean crop and record corn yield. |
| 2) | IGC and USDA both estimate significant reductions in exportable world ending stocks of corn and wheat in 2018-19. | 2) | Metals and softs are at or near new lows as the rising U.S. dollar and expectations for gradually higher interest rates exert bearish influence. |
| 3) | U.S. wheat prices continue to find support from higher prices in Europe. | 3) | China still has a 25% tariff on U.S. soybeans. Will this week's meeting in Washington change that? |
CORN December corn is up 1/4 cent with rain falling in Minnesota, Iowa, and western Illinois early Monday after the western Plains got a good dousing over the weekend. Most of the rain will stay east of the Dakotas the next seven days with heavier amounts around northeastern Iowa and eastern Ontario. Overall, that is a beneficial forecast for crops with moderate summer temperatures in late August. December corn has been holding roughly sideways since USDA estimated a 14.6 billion bushel crop and will likely be under pressure as harvest proves out, but active world demand should also help prices hold above their lows of July. For now, the trend in December corn remains sideways.
SOYBEANS November soybeans are up 10 1/4 cents early, trading above $9.00 for the first time since USDA estimated a record 4.59 billion bushel crop in the August WASDE report. Chinese officials will be in Washington this week, talking trade with the U.S. on Wednesday and Thursday. China's economy has been under pressure from the new U.S. tariffs and some are hoping real progress can be made, especially in terms of China's soybean tariff, but it is all speculation at this point. Meanwhile, weather conditions for the new crop appears favorable after the western Plains received rain over the weekend and the rest of the Midwest is expecting rain the next seven days. USDA's estimate of a record soybean crop is reasonable, but the demand side of the equation is difficult to predict. For now, the trend in November soybeans remains sideways while the future of trade with China continues to be a big wildcard.
WHEAT December K.C. wheat is down 2 1/4 cents early after much of the southwestern U.S. Plains received beneficial rain over the weekend, much needed help before planting starts up again next month. Europe's price of December milling wheat is down roughly 1% early Monday, showing less bullish excitement after Friday's rally on unconfirmed news that Russia may be considering export limits. There still is not much rain in the seven-day forecast for the northwestern U.S. Plains and western Canadian Prairie. Red flag warnings persist in Washington and Idaho, but there is no evidence yet of significant loss for the spring wheat crop. The trends for all three U.S. wheats remain up, but resistance from earlier highs in August may prove formidable.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.33 | -$0.01 | -$0.31 | Sep | $0.000 |
| Soybeans: | $8.09 | -$0.05 | -$0.83 | Nov | -$0.005 |
| SRW Wheat: | $5.32 | $0.19 | -$0.28 | Sep | $0.003 |
| HRW Wheat: | $5.46 | $0.18 | -$0.19 | Sep | $0.004 |
| HRS Wheat: | $5.59 | $0.13 | -$0.49 | 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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