DTN Early Word Grains
Better Markets to Close the Week
December corn was up 1 3/4, November soybeans were up 2 1/2, and December K.C. wheat was up 6 1/4.
CME Globex Recap:Lower global equity markets to close the week but the softening USD continues to support commodities as a whole. While lower this morning, crude oil futures have closed higher in nine of the last eleven sessions. Firmer Ag markets, although corn and soybeans putting in back-to-back lower weekly closes.
OUTSIDE MARKETS:Previous closes on Thursday showed the Dow Jones Industrial Average down 137.65 points at 25,986.92 and the S&P 500 down 12.91 points at 2,901.13 while the 10-year Treasury yield ended at 2.849%. Early Friday, DJIA futures were down 3.75. Asian markets are lower with Japan's Nikkei 225 down 4.35 (-0.02%) and China's Shanghai Composite down 12.49 (-0.46%). European markets are lower with London's FTSE 100 down 27.70 points (-0.37%), Germany's DAX down 116.62 points (-0.93%), and France's CAC 40 down 48.68 points (-0.89%). The euro was up 0.00015 at 1.16790 and the U.S. dollar index was down 0.0210 at 94.6820. September 30-year T-Bonds were up 6/32nds while December gold was up $7.80 at $1212.80 and October crude oil was down $0.44 at $69.81. Soybeans on China's Dalian Exchange closed down 0.45%.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Export commitments of corn and soybeans continue to run well ahead of year ago levels. | 1) | Delivery activity against the September corncontract was mostly larger than initial expectations. |
| 2) | Another meeting between Russian government officials and exporters on Monday will keep traders on edge. | 2) | A fifth case of African Swine Fever was found in China, raising anxiety about the disease's spread to Korea and Taiwan which would have major implications for US corn exports. |
| 3) | Russian winter wheat areas have been dry and are expected to remain so the next 3-4 weeks heading into fall seeding. | 3) | Kansas has been running mainly 100-200% of normal precip over the last 30-days as they head into winter wheat planting. |
| 4) | 4) |
CORN December corn is trading a bit better this morning, attempting to close the week on a positive note even though this will likely mark back-to-back lower weekly closes. Consolidative trade certainly appears to be taking hold as we enter the waiting period prior to harvest. 137 deliveries against the September contract were seen as adding a little bit of pressure, although with cash trading nearly 40 cents below delivery equivalence, it is not too big of a surprise. Also of note, there were 368 ethanol deliveries, all by ADM, one of the largest ethanol producers in the country. The nearby ethanol contract hit the lowest level yesterday since futures began trading in 2005. Export sales were a bit lighter than expected with 6.9mbu of old crop sales and 20.7mbu of new crop sales. This brings total export commitments for 17/18 to 2.383bbu, up 7% from a year ago and all coming down to actual shipments. New crop corn sales of 410.9mbu are up 49% from a year ago at this time. A well-known commodity brokerage was out after the close with their latest customer survey for corn yield, putting the crop at 177.7bpa for a national average yield vs. USDA at 178.4bpa. The Argentine Peso hit a new, all-time record low today of 41.47 against the USD. This could prompt Argentine government officials to implement corn and soybean export taxes as their economy spirals out of control. As noted earlier this week, a rapidly depreciating currency in Argentina tends to cause farmers to hoard grain more so than sell it unlike their Brazilian counterparts.
SOYBEANS November beans are posting small gains this morning, continuing the one step forward/two steps back approach as of late. New lows for the move were made overnight, inching closer to testing the July contract lows. There were 511 deliveries of soybeans against the September contract last night, all but one of which came from an ABN Amro customer. There were no strong commercial stoppers. 161 soybean meal deliveries and 1,313 soybean oil deliveries also posted overnight. The continued collapse in South American currencies is keeping traders anxious as FOB spreads remain in favor of Brazilian and Argentine soybeans. In addition, the fifth case of African Swine Fever was reported in China yesterday, leading to the culling of another 379 hogs. This brings the total number of hogs culled to 25,000 as the country tries to limit the spread of this incredibly infectious disease. Further, a spokesman for the Chinese government from their trade delegation presented in the United States yesterday, reiterating their ideas for 17/18 soybean imports at 94MMT vs. USDA at 96MMT. More troubling, they said Chinese 18/19 soy imports could be as low as 86MMT vs. USDA's current estimate of 95MMT due to the tariffs implemented by the PRC. They stressed they could limit the impact of the tariffs by de-stocking state reserves and relying more on competitor origins. Export sales yesterday were middle of the road with old crop at 4.1mbu, taking total 17/18 commitments to 2.163bbu vs. 2.235bbu a year ago. New crop sales were decent at 21.7mbu, pushing new crop commitments to 485.7mbu vs. 422.5mbu a year ago. Traders will be watching the heavy rain forecast for IA/MN/WI/E-NE in the coming 5-7 days. The morning GFS is putting another 2-5" in a large area of the aforementioned states which would not be welcome at this point in the growing season.
WHEAT Wheat markets are slightly firmer this morning, following a wild 24-hours across the three exchanges. Markets rallied another 8-9c yesterday morning following the 15 to 20-cent gains on Wednesday, only to do an about face and close lower by 5 to 8 cents. The rally the previous day on Russian exporters being forced to limit export offerings, as well as frost risk in the Aussie wheat belt, was obviously overblown. Deliveries against the September contract were also a bit larger than expected in hard wheat with 376 delivered against the KWU by Cargill, although no Chicago deliveries were recorded. There were 384 deliveries of old receipts in Minneapolis by CHS with various stoppers stepping in. StatsCan will be out later this morning with their estimates of the Canadian wheat crop. The average trade guess is 30.6MMT with a range of 29.3-32.7MMT and would compare with 30.00MMT in 17/18. Export sales yesterday continued their recent string of mostly disappointing performances. All wheat sales totaled 15.2mbu vs. the 17.4mbu needed weekly to hit the USDA forecast. Total commitments of 329.6mbu are down 26% from a year ago. Commitments as a percentage of the marketing year forecast stand at 32.16%, the smallest for this week in August since 1993. The percentage of shipments to the marketing year forecast of 16.73% is the smallest since 1992. The US wheat balance sheet is counting on an incredible three quarters of export demand, otherwise carryout is likely to rise given our known supply.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.09 | $0.00 | -$0.47 | Dec | $0.001 |
| Soybeans: | $7.37 | -$0.06 | -$0.95 | Nov | -$0.011 |
| SRW Wheat: | $4.81 | -$0.07 | -$0.54 | Dec | -$0.003 |
| HRW Wheat: | $4.95 | -$0.06 | -$0.46 | Dec | $0.020 |
| HRS Wheat: | $5.18 | -$0.06 | -$0.66 | Dec | $0.022 |
Tregg Cronincan be reached at tmcronin31@gmail.com
Treggcan be followed throughout the day on Twitter @5thWave_tcronin
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