DTN Closing Grain Comments

Grains Lower Ahead of Wednesday's Reports

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

General Comments:

Corn was down 1/2 cent in the December contract and down 1/2 cent in the July. Soybeans were down 13 1/2 cents in the November contract and down 13 1/2 cents in the July. Wheat closed down 9 1/2 cents in the December Chicago contract, down 8 cents in the December Kansas City, and down 4 3/4 cents in the December Minneapolis contract. The September U.S. dollar index is .110 higher at 95.220. December gold is $1.90 higher at $1,201.70/ounce while December silver is .027 cents lower and December copper is .0075 lower. The Dow Jones Industrial Average is up 128.37 points at 25,985.44. October crude oil is up as $1.76/barrel at $69.30/barrel as Hurricane Florence nears the U.S. East Coast and October natural gas is .025 higher.

Corn:

December corn closed 1/2 cent higher at $3.66 3/4 on Tuesday, trading both sides of Monday's close in sideways range-bound trade in advance of Wednesday's WASDE report from USDA. Tuesday's close ended near the middle of the session's trading range with continued chart resistance at the 50-day moving average of $3.69 1/4 as buyers and sellers search for direction. Brazil's CONAB has trimmed its estimate for that country's 2018 corn production to 81.4 mmt, down 824,000 mt, which points to the potential for further cuts by USDA and could weigh further on global stocks. DTN's Market Weather Factors were neutral on Tuesday, despite Hurricane Florence bearing down on the southeast coast, although this bears watching. USDA's weekly Crop Progress Report, delayed overnight due to technical issues, shows the U.S. crop still ahead of its average pace, with 86% estimated dented (75%) and 35% rated mature (21%), with the five-year average in brackets. The corn harvest is estimated 5% complete, up from the five-year average of 3%. The overall crop condition showed modest improvement with 68% viewed as good to excellent, up one point from last week while above the 61% reported this time last year. DTN's National Average Corn Basis remained unchanged on Monday at 43 cents under the December, leaving the National Corn Index at $3.24/bu.

Soybeans:

November soybeans finished 13 1/2 cents lower on Tuesday at $8.31 3/4 bu, ending at the lower end of the session's trading range while holding above the contract's July low of $8.26 1/4 bu. The USDA reported a 192,000-mt sale canceled to an unknown destination, which may have taken the wind from the sails on Tuesday, ahead of what is expected to be an upward revision in production in Wednesday's WASDE report. This week's Crop Progress report shows the U.S. crop remaining ahead of average growth stages, with 31% of the crop estimated to be dropping leaves, above the five-year average of 19%. Recent moisture has improved the crop condition estimate, shown at 68% good to excellent, up from 66% last week and the 60% reported this time last year. This supports pre-report estimates that point to the likelihood of an upward revision in production in Wednesday's USDA report. DTN's National Average Soybean Basis weakened 1 cent to 99 cents under the November contract on Monday, leaving the National Soybean Index at $7.46/bu.

Wheat:

Wheat prices failed to hold gains realized overnight, while giving up a portion of Monday's double-digit gains in Tuesday's session. December Chicago wheat closed down 9 1/2 cents at $5.18 3/4 on Tuesday, while December HRW ended 8 cents lower at $5.22 3/4, and MGEX spring wheat settled 4 3/4 cents lower at $5.75 1/4. The Chicago contract reached its highest point in four sessions on Tuesday, and has run into chart resistance at its 200-day moving average at $5.24 1/4/bu. The December European milling wheat contract gave up .75 euros on Tuesday following the first higher daily close seen in six sessions on Monday. While bad news continues to surface for global wheat crops, the market has struggled to rally. DTN weather forecasts point to rains in areas of Ukraine and Russia that are welcome for fall-seeded wheat but are leading to delays in harvest of spring-seeded crops that bears watching.

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

Follow him on Twitter @ToddHultman1

(CZ)

Cliff Jamieson