DTN Closing Grain Comments

General Comments:

Corn was up 1 3/4 cents in the December contract and up 1 1/2 cents in the July. Soybeans were up 5 cents in the November contract and up 5 cents in the July. Wheat closed down 4 1/2 cents in the December Chicago contract, down 3 3/4 cents in the December Kansas City, but was up 2 1/2 cents in the December Minneapolis contract. The December U.S. dollar index is up 0.69 at 94.46. December gold is down $10.50 at $1,188.60 while December silver is down 10 cents and December copper is down $0.0565. The Dow Jones Industrial Average is up 129 points at 26,514. November crude oil is up $0.51 at $72.08. November heating oil is up $0.0158 while November RBOB gasoline is up $0.0168 and November natural gas is up 0.092.

Corn:

December corn ended up 1 3/4 cents at $3.64 3/4 Thursday, earning small benefit from another week of bullish export sales data. Early Thursday, USDA said sales and shipments of corn totaled 67.4 million and 53.5 million bushels, respectively, last week, putting total commitments up 61% and actual shipments up 47% in 2018-19 from a year ago. That is a strong early pace which should be more helpful to corn prices after the current focus on harvest subsides. Thursday's trade was also quiet ahead of Friday's Grain Stocks report and Small Grains Summary from USDA, set for 11 a.m. CDT (see Thursday's report preview, "Another Row-Crop Season Ready for the Books"). Dow Jones expects USDA to show 2.002 billion bushels of corn stocks on hand as of September 1, 2018. If true, corn's ending stocks for 2017-18 will be a little lower than the previous year, thanks to record high demand of 14.935 billion bushels. For 2018-19, the fundamental outlook for corn is neutral to bullish and one issue that will need to be watched is Wednesday's news that Japan and the U.S. are starting trade negotiations. Japan bought 20% of U.S. corn exports in 2017-18. Technically, the September 18 low of $3.42 1/2 in December corn is possibly this year's seasonal low. DTN's National Corn Index closed at $3.20 Wednesday, up from its 2017 low and priced 43 cents below the December contract. In outside markets, the December U.S. dollar index is up 0.69 in the aftermath of Wednesday's rate hike from the Fed. Earlier Thursday, the U.S. Commerce Department said real GDP was up 1.0% in the second quarter and up 2.9% from a year ago, as expected. Nominal GDP was up 5.4% from a year ago to $20.4 trillion.

Soybeans:

November soybeans finished up a nickel at $8.55 Thursday with possible short-covering happening ahead of Friday's USDA report. Dow Jones' survey expects USDA to say September 1 soybean stocks totaled 394 million bushels or roughly 9% of annual use in 2017-18. There may be a surprise in this number, but if the survey is correct, U.S. soybeans will have seen record demand of 828 million bushels in the fourth quarter -- the same quarter in which China started its 25% tariff. Early Thursday, USDA said last week's export sales and shipments totaled 32.0 million and 30.1 million bushels, respectively, putting total commitments down 16% from a year ago and total shipments down 18% from a year ago -- both bearish early paces for 2018-19. Thursday's weather map showed rain along the Ohio River Valley, but the rest of the Midwest is expected to be mostly dry until more rain chances return Sunday into next week. Trade relations with China remain a bearish concern for soybean prices, but aside from the political risk, the low of September 18 may hold as support for the rest of 2018. DTN's National Soybean Index closed at $7.47 Wednesday, up from its lowest price in 11 years and priced $1.03 below the November contract, the weakest basis in at least 11 years.

Wheat:

December K.C. wheat closed down 3 3/4 cents at $5.17 1/4, staying near the lower end of its trading range in 2018 as traders may be bracing for bearish news in Friday's Grain Stocks report. Dow Jones' survey expects to see 2.35 billion bushels of U.S. wheat stocks on hand September 1, representing the lowest first quarter demand in seven years, if true. Thursday's report of weekly export sales can't argue with the bearish export pace, but at least showed higher sales for last week. USDA said 24.1 million and 17.8 million bushels of export sales and shipments helped total shipments improve to down 29% in 2018-19 from a year ago -- still nothing to brag about. The hope for higher wheat exports ahead depends on world production and, on that point, USDA and the International Grains Council (IGC) do not agree. USDA sees just a 3% drop in 2018-19 production while IGC is estimating a drop of over 5%. USDA will also release a Small Grains Summary Friday with only insignificant adjustments to wheat production estimates anticipated. For now, December contracts for all three wheats are holding in a sideways range. DTN's National SRW Index closed at $4.73 Wednesday, 45 cents below the December contract and up from its lowest price in two months. DTN's National HRW Index closed at $4.81 Wednesday, also up from its lowest price in two months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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