DTN Closing Grain Comments

Soybean Meal Tugs Soybean Prices Higher

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

General Comments:

Corn closed up 3/4 cent in the December contract and was up 3/4 cent in the July. Soybeans closed up 9 3/4 cents in the November and up 8 cents in the July. Wheat closed up 3 cents in the December Chicago, up 2 cents in the December Kansas City, and was up 1 1/2 cents in the December Minneapolis. The December U.S. dollar index is down 0.05 at 95.36. December gold is up $3.50 at $1,205.10 while December silver is up 6 cents and December copper is down 0.0145. The Dow Jones Industrial Average is down 253 points at 26,374. November crude oil is up $0.15 at $74.48. November heating oil is down $0.0027 while November RBOB gasoline is down $0.0109 and November natural gas is down $0.033.

For the week:

December corn closed up 12 cents and July was up 11 cents. November soybeans were up 23 1/2 cents while the July was up 23 cents. December Chicago wheat was up 12 cents, December Kansas City wheat was up 13 cents, and December Minneapolis wheat was up 18 3/4 cents.

Corn:

December corn ended 3/4 cent higher Friday at $3.68 1/4 and was up 12 cents on the week, helped by a bullish early export pace and anticipation of possible flooding in the Corn Belt the next several days. Significant crop loss is not expected, but there is a flash flood watch in eastern Iowa, southern Wisconsin, and northern Illinois -- areas that don't need the heavy rain amounts found in the seven-day forecast. USDA's next WASDE report will be released Thursday, October 11, and the corn crop estimate is expected to stay high, near September's guess of 14.8 billion bushels. Thanks to the brisk start in the new season's corn exports, the ending stocks estimate could be adjusted modestly lower Thursday, from the current 1.774 billion bushels. For now, the trend in December corn remains sideways with prices expected to stay above their September low. DTN's National Corn Index closed at $3.24 Thursday, up from this year's low and 43 cents below the December contract. In outside markets, the December U.S. dollar index is trading down 0.05 after the U.S. Labor Department said non-farm payrolls were up 134,000 in September, less than expected. Offsetting some of the disappointment, the previous two months saw a revised increase of 87,000 jobs. The U.S. unemployment rate fell from 3.9% to 3.7%, the lowest since 1969 and adding to the case for a higher U.S. dollar.

Soybeans:

November soybeans closed up 9 3/4 cents at $8.69 Friday and were up 23 1/2 cents on the week. The same harvest concerns described for corn above also apply to soybeans. It may be that the upcoming rains prove to be little more than a nuisance causing delay, but it has helped to ease some of the bearish harvest anticipation -- at least until Thursday when USDA makes its next crop estimate. USDA's weekly export sales report showed soybean meal shipments up 20% in 2017-18 from a year ago and the strong demand continues. Early Friday, USDA said 134,000 mt of soybean cake and meal were sold to Philippines for 2018-19. Soybean prices also got a boost Friday from Census Bureau data which showed U.S. soybean exports up 13% in August from a year ago -- the second month since China's tariff that U.S. soybean exports proved higher, this time with Iran listed as the top destination. For now, the trend in November soybeans remains sideways with prices holding above their September low. DTN's National Soybean Index closed at $7.56 Thursday, up from its lowest price in 11 years and priced $1.03 below the November contract -- the weakest basis in at least 11 years. Among October contracts, delivery intentions totaled 407 for soybean oil and 68 for meal early Friday.

Wheat:

December K.C. wheat closed up 2 cents at $5.24 1/4 and was also up 13 cents on the week as prices continue to find support near the lower end of this year's trading range. Friday's weather allowed one more day of decent planting conditions for U.S. winter wheat before rain moves into the southwestern U.S. Plains Saturday through early next week. Farther north where spring wheat crops are still waiting in Canada's fields, temperatures remain cold, but the forecast is drier for the week ahead, helpful to harvest. Thursday's WASDE report will be watched for any changes in wheat crop estimates and, so far, the U.S. is not benefiting from this year's smaller world production. Even so, the trends in all three wheats remain sideways, holding above their July lows. DTN's National SRW index closed at $4.79 Thursday, 39 cents below the December contract and up from its lowest close in two months. DTN's National HRW index closed at $4.84 Thursday, also up from its lowest close in two months.

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

Follow him on Twitter @ToddHultman1

(CZ)

Todd Hultman