DTN Before The Bell Grains

Morning CME Globex Update:

A monthly set of USDA supply and demand estimates will be released Thursday, so pre-report positioning may still be taking place Wednesday. Relatively heavy volumes of mostly bearish interest have been shown in the soybean market, which is leading the sector's losses early Wednesday alongside lower crude oil prices.

Other Markets:

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

Corn:

Unharvested corn fields in the Dakotas are being hit with snow Wednesday, but as a nationwide aggregate, corn harvest remains ahead of pace, according to the weekly Crop Progress report. Corn harvest advanced 8 percentage points in the week leading up to Sunday, when it was officially pegged at 34 percent complete. Ethanol futures did display a little life Tuesday, on a day that year-round E15-blending was announced, but they haven't been able to move higher than $1.32 1/2 per gallon. Overall, the commodities sector seems to be moving lower Wednesday, and the corn market, which has rallied over 20 cents since mid-September, seems to have reached a plateau. The DTN National Corn Index was $3.22 Tuesday afternoon, showing national average basis steady at 43 cents under the December futures contract.

Soybeans:

Soybean harvest progress (32 percent complete) slipped behind the five-year average harvest pace during this long stretch of maddening, wet weather in the Corn Belt. Better weather is on the way, but it's still too wet to harvest anything in most of the Midwest Wednesday, and soybean pods are splitting open and sprouting in some fields. Not good. Unfortunately for producers, prices are also "not good" in historical terms. The November chart is dipping under $8.60 per bushel Wednesday morning, $2.00 per bushel under the past high from late May. Malaysian palm oil futures are moving lower Wednesday, and the edible oils seem to be leading Wednesday's pullback in agriculture commodities. In the U.S. cash market for soybeans, the DTN National Soybean Index was $7.61 per bushel Tuesday, or $1.02 under the November futures contract, still showing historically weak average basis bids.

Wheat:

U.S. wheat futures are down 1 to 2 cents Wednesday morning, led by the losses in soybeans and outside commodities. Manitoba's spring wheat harvest was seen at 97 percent complete, and the weather forecast calls for helpfully dry weather for the Canadian prairies over the next six to ten days. In the U.S., winter wheat planting remains on pace or a little fast in some places, like Kansas, where 58 percent of winter wheat fields were seeded as of Sunday night, compared to an average of 49 percent seeded by this time of year. The outlook for interest rates seems to have stabilized after last week's volatility, and futures prices for 10-year T-notes were implying an interest rate less than 3.2 percent in overnight trade. DTN's collected SRW Index was $4.76 Tuesday (showing the average U.S. basis bid at 39 cents under the December Chicago futures contract); the HRW Index was $4.81 (39 cents under the December KC futures contract); and the Spring Wheat Index was $5.35 per bushel (59 cents under the December Minneapolis contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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