DTN Closing Grain Comments

Grains Mostly Lower on Tuesday

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 5 3/4 cents in the September contract and down 5 1/4 cents in the December. Soybeans were down 14 1/4 cents in the September contract and down 15 cents in the November. Wheat closed up 3/4 cents in the December Chicago contract, down 2 1/4 cents in the December Kansas City, and down 1 3/4 cents in the December Minneapolis contract. The September U.S. dollar index is down .089 at 94.595. December gold is down $7.60 at $1,208.40/ounce while September silver is down .184 cents and September copper is up .185. The Dow Jones Industrial Average is up 37 points at 26,087. October crude oil is down $.30 at $68.57/barrel and October natural gas is down .024.


Corn prices finished lower for the seventh time in eight sessions on Tuesday, given a combination of commercial and noncommercial selling, with late-session selling pushing prices below Monday's low to fresh lows for the week. The December contract ended 5 1/4 cents lower at $3.56 1/4/bu, while nearing the July low of $3.50 1/4/bu. The Dec/March futures spread weakened this session, a sign of commercial selling, with the fast pace of new-crop sales still not enough to support this market. Crop conditions were reported to stabilize this week, which follows a number of weeks that showed a modest week-over-week deterioration, although 68% of the crop rated good to excellent remains above last year's 62% for the same week. Crop maturity is well ahead of the average pace. The National Average Corn Basis was unchanged on Monday at 32 cents under the September, while the National Corn Index fell 2 cents to $3.14/bu.


While soybean use is forecast by USDA as the second largest on record for 2018/19, a massive build in forecast stocks for 2018/19 and a continued favorable weather pattern continue to weigh on the market, along with the ongoing trade issues faced with China. The November contract ended 15 cents lower at $8.33 1/4/bu, with Tuesday's low only 6 3/4 cents away from a test of the contract's July low. Tuesday's losses were despite a weaker U.S. dollar trade, as well as supportive commercial buying interest, while losses in both soybean oil and soymeal ended lower, despite the announcement of both old-crop and new-crop meal sales to Mexico. One supportive feature was a higher close for Malaysian palm oil this session, given increasing concerns surrounding a drop in production. The National Average Soybean Basis weakened 1 cent on Monday to 92 cents under the November, while the National Soybean Index was reported down 8 cents to $7.56/bu.


Wheat markets were encouraged by the presence of a lone U.S. offer in Tuesday's Egypt tender, the first time U.S. wheat has shown up in the mix since July 2017. Reports suggest 18 offers were made in total, largely reflecting the aggressiveness of Black Sea traders. A total of 350,000 mt was purchased, comprised of 290,000 mt from Russia and 60,000 mt from Ukraine for Oct 11-20 delivery. Wheat futures ended mixed on Tuesday, with December SRW posting a rare 3/4 cent gain, while all other wheat contracts, including the balance of the SRW contracts, posted losses. December HRW closed 2 1/4 cents lower and December spring wheat finished 1 3/4 cents lower, while all three reached lower lows in their respective short-term downtrend while ending below the support of their respective 67% retracement lines. Paris milling wheat for December delivery failed to sustain gains realized early in the session, ending .75 euros lower while just below the 38.2% retracement line while only a weak carry exists in the Dec/March spread, which could be viewed as bullish overall. A tightening of exportable world stocks remains a bullish feature for this market, but simply needs time to play out as the Russians have their way with buyers. The National Average SRW Index was calculated at $4.72/bu on Monday, 27 cents under the September contract, while the National Average HRW Index was calculated at $4.83/bu, 19 cents under the September.

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

Follow Todd Hultman on Twitter @ToddHultman1


Cliff Jamieson