DTN Closing Grain Comments

Wheat Markets Correct, Weighing on Row Crops

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

General Comments:

September corn closed 1/4 cent lower and the December contract closed unchanged. Soybeans were down 3 3/4 cents in the September contract and down 4 1/2 cents in the November. Wheat closed down 6 3/4 cents in the December Chicago contract, down 8 1/4 cents in the December Kansas City and down 7 3/4 cents in the December Minneapolis contract.

The September U.S. dollar index is up .148 at 94.850. December gold is down $5.00 at $1,206.50/ounce, while September silver is down .227 cents and September copper is down .039 cents. The Dow Jones Industrial Average is down 121 points at 26,003. October crude oil is up $.76 at $70.27/barrel and October natural gas is up .019.

Corn:

Corn futures traded both sides of Wednesday's close while ending steady to lower with the September down 1/4 cent and the December unchanged at $3.56 1/2/bu. Weekly export sales were reported at 6.9 mb for 2017-18 and 20.7 mb for 2018-19. Total old-crop shipments plus outstanding sales are reported at 2.383 bb, 7% higher than the previous year, while weekly shipments of 52.9 mb are up 2% from the same week last year, leaving this report viewed as bearish for old-crop and bullish for new-crop. In addition, the USDA announced 100,611 mt sold to Mexico for 2018-19. One change in Thursday's trade was signs of supportive commercial buying interest, with the Dec/March spread narrowing to minus 12 3/4 cents, the first time we have seen this spread narrow on the daily chart since August 7, while perhaps building a floor above July low. December corn remains poised to close lower for the second straight week on the daily chart, while reaching its lowest levels in six weeks. Weekly stochastics have not yet reached over-sold territory, suggesting that some further downside remains possible from a technical perspective.

Soybeans:

Soybean futures faced pressure on Thursday, with the November future down 4 1/2 cents to $8.31 1/2/bu, the lower-end of this session's trading range. Noncommercial selling seems behind Thursday's move, with daily volume falling for the third consecutive session. Thursday's daily chart shows a bearish outside-day trading bar formed, while Thursday's low came within 2 3/4 cents from testing the November contract's July low of $8.26 1/4/bu, a test that seems inevitable in upcoming sessions. Early harvest combined with a lack of bids of the West Coast remain a growing concern, with Wednesday's National Average Basis of 94 cents under the November the weakest seen in almost 10 years. Weekly sales and shipments data in the U.S. was viewed as neutral for old-crop and new-crop soybeans, with 4.1 mb of old-crop and 21.7 mb of new-crop sold over the past week. Cumulative old-crop shipments plus outstanding sales are 3% below last year, while weekly shipments were also 3% lower than the same week last crop year.

Wheat:

After trading higher on rumors and concerns of global exportable supplies in 2018-19 on Wednesday, wheat futures ran out of gas after reaching four-day highs on Thursday, only to finish the day in negative territory. December K.C. wheat ended 8 1/4 cent lower, December spring wheat closed 7 3/4 cents lower and December Chicago wheat ended 6 3/4 cents lower. The front-end export picture remains dismal, with weekly export sales reported in the U.S. viewed as bearish with total shipments plus outstanding sales reported at 330 mb, down 26% from last year, while weekly shipments of 14.9 mb were down 35% from the same week last crop year. Paris milling wheat reached a six-day high on Thursday given follow-through buying from Wednesday's session, although ended 1.50 euros lower in the end with noncommercial traders taking profits. DTN weather forecasts are calling for increased shower activity across the Southwest over the weekend and continuing into next week, which will benefit fall-seeded crops. Traders may take note of Statistics Canada's first production estimates of the season to be released on Friday, with the likelihood of all-wheat production near 30 million tons.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

(CZ)

Cliff Jamieson