DTN Closing Grain Comments

Wheat Turns Higher, Row Crops Mixed

Todd Hultman
By  Todd Hultman , DTN Grains Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn closed up 1 1/4 cents in the December contract and was up 3/4 cent in the July. Soybeans closed down 2 3/4 cents in the November and down 2 1/4 cents in the July. Wheat closed up 14 1/2 cents in the December Chicago, up 14 1/2 cents in the December Kansas City and was up 10 1/4 cents in the December Minneapolis.

The December U.S. dollar index is up 0.47 at 94.56. December gold is down $8.70 at $1,199.50, while December silver is down 12 cents and December copper is down 0.0665. The Dow Jones Industrial Average is down 27 points at 26,119. October crude oil is up $0.40 at $68.99. October heating oil is down $0.0100 while October RBOB gasoline is down $0.0169 and October natural gas is down $0.048.

For the week:

December corn closed down 15 1/4 cents and July was down 14 1/2 cents. November soybeans were down 13 1/2 cents, while the July was down 11 1/2 cents. December Chicago wheat was up 1/4 cent, December Kansas City wheat was up 1 1/2 cents, and December Minneapolis wheat was up 2 1/4 cents.

Corn:

December corn ended up 1 1/4 cents at $3.51 3/4 Friday, a quiet finish to a week that lost 15 1/4 cents after USDA increased its corn crop estimate to 14.83 billion bushels on Wednesday. Almost half of North Carolina's 106-million-bushel corn crop was harvested before Florence arrived, but the rest is at risk from high winds and flooding. Meanwhile, crops are drying down across the Midwest, which is helpful to harvest conditions before rain chances increase early next week, especially in the north-central Midwest. As mentioned in Friday's DTN article, "Good Grief, Super Corn Returns," this week's higher crop estimate from USDA will take some time for the market to digest as we work through harvest, but after harvest, the demand outlook for U.S. corn is better than it has been in several years. For now, the trend in December corn remains sideways. DTN's National Corn Index closed at $3.07 Thursday, a new nine-month low and 44 cents below the December contract. In outside markets, the December U.S. dollar index is trading up 0.47 after Bloomberg News reported President Trump gave orders to move ahead on $200 billion of new tariffs against Chinese goods. There has been no official announcement yet as of the time of this writing.

Soybeans:

November soybeans ended 2 3/4 cents lower at $8.30 1/2 Friday in light trading and were also down 13 1/2 cents on the week after USDA increased its U.S. soybean crop estimate to a new record high of 4.69 billion bushels on Wednesday. As bearish as that is, coming on the heels of a record soybean crop in Brazil earlier this year, November soybean prices are showing signs of inelasticity -- a possible early hint of support at November prices near their lowest levels in ten years. While Hurricane Florence has our attention in North Carolina, the Midwest is enjoying favorable harvest weather and the soybean harvest is likely to make early progress the next several days before increased chances for rain appear early next week. The big unknown factor for U.S. soybean prices in 2018-19 continues to be demand and the first week of the new season started with total sales and shipments roughly even with a year ago. Bloomberg News reported Friday that President Trump instructed his aides to proceed with $200 billion of new tariffs against Chinese goods, keeping the pressure on in spite of this week's earlier news of trade talks resuming. For now, November soybean prices continue to experience harvest pressure yet, the trend remains sideways. U.S. trade policy remains a bearish factor for soybeans but could change on a dime -- making prices even more difficult to predict than usual. DTN's National Soybean Index closed at $7.32 Thursday, near its lowest price in over nine years and priced $1.01 below the November contract -- the weakest basis in at least eleven years.

Wheat:

December Chicago wheat closed up 14 1/2 cents Friday at $5.11 1/2, possibly finding support near the low end of its seven-month trading range as prices continue to vacillate between roughly $5.00 and $6.00. For the entire week, the December contract was up a tick, surviving any bearish effects it received from Wednesday's WASDE report. USDA expects world ending wheat stocks to come down a little in 2018-19, from 274.4 to 261.3 mmt (9.60 bb). However, U.S. ending wheat stocks remain stuck at 935 million bushels with an exports running 31% below last year's low pace. Winter wheat planting is just getting started in the U.S. and the seven-day forecast is mostly favorable with heavy rain expected in southern Texas, but lighter amounts elsewhere around the southwestern Plains. For now, the trends in all three wheats remain sideways and erratic. DTN's National SRW index closed at $4.52 Thursday, 45 cents below the December contract and its lowest close in two months. DTN's National HRW index closed at $4.60 Thursday, its lowest close in two months. September contracts of U.S. grain futures expired Friday with nothing unusual witnessed.

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

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(CZ)

Todd Hultman