DTN Before The Bell Grains

Morning CME Globex Update:

Extreme gains in the Brazilian real overnight are a bullish influence on soybean prices Monday. Corn seems more reluctant to show bullishness, despite facing the same U.S. harvest delays as soybeans. The bond markets will be closed for Columbus Day, but bond futures continue to trade, and the stock markets and commodity futures will proceed as usual.

Other Markets:

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

Corn:

The corn market will get a sense of how badly recent rains have delayed the nationwide row crop harvest, and the official Crop Progress numbers' release will be delayed by a federal holiday until Tuesday afternoon. Corn futures prices are nearly stable with Friday's close. The recent upward trend has brought the December contract more than 24 cents above the low from September 18. The December 2019 contract is trading above $4.00 per bushel Monday morning. Harvest-disrupting rain is forecast to continue in Iowa, for instance, through Tuesday night, and then perhaps pop up again later in the week. USDA will offer another monthly round of supply and demand estimates this Thursday, October 11. The DTN National Corn Index was $3.25 Friday afternoon, showing national average basis stronger at 44 cents under the December futures contract.

Soybeans:

Soybean futures prices traded both sides of unchanged as Monday morning trade warmed up, eventually succumbing to pressure from the rest of the commodity sector. Over the weekend, the far-right candidate in Brazil's presidential election won 46% of the first round of voting. A second round of voting will take place October 28. But for now, traders are interpreting Bolsonaro's performance as a positive sign for the country's businesses and economy. The Brazilian currency shot up a further 4% in early Monday trading, and a stronger real is generally bullish to global soybean prices. Brazil's soybean planting progress will experience some delays from scattered showers this week, but the precipitation is welcome at this time of year. In the U.S. cash market for soybeans, the DTN National Soybean Index was $7.66 per bushel Friday, or $1.03 under the November futures contract, showing historically weak average basis bids.

Wheat:

Monday is Thanksgiving in Canada, and western Canadian farmers who still have spring wheat and canola in the fields waiting to be harvested will be thankful to see a drier weather pattern in the forecast. Wheat prices are generally lower Monday morning alongside volatile bearishness in several segments of the outside markets. The U.S. Dollar Index is resuming its upward trend Monday morning, and dollar-denominated commodity prices are therefore pressured lower. Crude oil, for instance, is losing more than $1 per barrel. The Shanghai stock market dropped 3% Monday after traders returned from a holiday. U.S. stocks are also anticipated to trade lower on Columbus Day (Native American Day in South Dakota). DTN's collected SRW Index was $4.82 Friday (showing the average U.S. basis bid steady at 39 cents under the December Chicago futures contract); the HRW Index was $4.85 (steady at 39 cents under the December KC futures contract); and the Spring Wheat Index was $5.33 per bushel (weaker at 58 cents under the December Minneapolis contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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