DTN Before The Bell Grains

Morning CME Globex Update:

Heavy volumes of futures trading was noted overnight, but in the financial markets (bonds, currencies) instead of for real, consumer commodities. The stock market is expected to open sharply lower amid inflation concerns. Soybean, corn, and wheat prices are starting the day with gains, but so far not pushing to fresh highs.

Other Markets:

Dow Jones:	Lower
U.S. Dollar Index:	Lower
Gold:	Higher
Crude Oil:	Lower

Corn:

The corn market received a bullish weekly export sales report Thursday morning, showing 1,431,000 metric tons (mt) of sales in the week leading up to Sept. 27, and following this Wednesday's news of 230,000 mt of corn sold to Japan. Overall, it has been a positive week for export demand sentiment, with the new USCMA (the U.S. Canada Mexico Agreement, i.e. the replacement for NAFTA) reassuring our largest corn customer, although it is still subject to congressional approval. There have also been bullish concerns about row-crop harvest delays as Corn Belt weather turns decidedly wet in the last few days of this week. Corn futures prices are higher by a penny or two Thursday morning. Heavier rains are expected to continue over the Columbus Day weekend. The DTN National Corn Index was $3.21 Thursday afternoon, showing national average basis steady at 44 cents under the December futures contract.

Soybeans:

Soybean futures are mostly higher at the start of Thursday's session with an overnight trading range of only 6 cents. The weekly export sales report was predictably huge after Mexico, Argentina and Germany all came in as eager buyers of soybeans at current price levels. The overall sales figure was 1,521,200 mt of soybeans. The first round of Brazil's presidential election will take place on Sunday, so traders will be wary of volatile currency movements affecting global soybean prices. So far, the Brazilian planting season for their 2019 soybean crop has advanced well ahead of its usual pace. Malaysian palm oil prices posted sharp gains on Wednesday. In the U.S. cash market for soybeans, the DTN National Soybean Index was $7.58 per bushel, or $1.04 under the November futures contract, showing historically weak average basis bids.

Wheat:

The outside markets could be volatile and exert pressure on wheat prices Thursday, with the U.S. dollar index 1.8% higher than a week ago and inflation expectations driving benchmark interest rates to seven-year highs. Futures on the 10-year T note continued to be sold off overnight, implying yields as high as 3.18%. Friday's unemployment numbers will be closely watched. Otherwise, the wheat markets are posting light gains alongside corn and soybeans Thursday morning. The weekly export sales report showed 435,300 mt of wheat sold: a bearish pace. The monthly supply and demand estimates from the USDA will be released next Thursday, Oct. 11. DTN's collected SRW Index was $4.76 Wednesday (showing the average U.S. basis bid steady at 39 cents under the December Chicago futures contract); the HRW Index was $4.80 (steady at 39 cents under the December KC futures contract); and the Spring Wheat Index was $5.32 per bushel (58 cents under the December Minneapolis contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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