DTN Before The Bell Grains

Morning CME Globex Update:

Soybeans are experiencing some selling pressure Tuesday morning, but corn and wheat futures are mixed and have much less of a sense of direction. The stock market is expected to open with stiff losses, with the S&P 500, for instance, lower than it's been since July. However, the grain markets have so far been mostly immune to that volatility.

Other Markets:

Dow Jones: Lower

U.S. Dollar Index: Lower

Gold: Higher Crude Oil: Lower

Corn:

Corn futures are mostly flat Tuesday morning in the wake of Monday's light gains. However, widening in the futures spreads suggest commercial traders feel increasingly confident about the 14.8 billion bushels (bb) of corn production that will come to the industry in this marketing year. The nearby December-to-March futures spread has been inching wider toward 12 1/2 cents, and the March to May 2019 spread traded at 7 3/4 cents overnight. Nationwide, the corn harvesting progress advanced 10 percentage points in the week leading up to Sunday night: a stiff pace of activity, which kept this year's advancement at 2 percentage points faster than the five-year average pace. The DTN National Corn Index was $3.28 per bushel (bu) Monday, showing national average basis steady at 42 cents under the December futures contract. Looking past the current marketing year, the December 2019 contract is back above the $4.00 mark Tuesday morning.

Soybeans:

In Monday's weekly Crop Progress report, the nationwide soybean harvest was shown slipping even further behind its average pace: 53% complete compared to the 69% that is typical for this time of year. Condition ratings remained static, however, now that there is no longer snow or rain presently falling on the fields. What damage was done to the crop may already be done, and harvesters are doing the best they can to pick up what soybeans are out there. The November 2018 to March 2019 futures spread, an indication of commercial traders' sentiment about storing soybeans, has not budged since the rain stopped. It sits at 27 1/4 cents Tuesday morning. Sunny weather is expected to continue for the next couple of days in the Midwestern Corn Belt, but harvest disruptions due to light rain may pop up in the later part of the week. The nationwide average soybean basis bid remained steady Monday at $1.00 under the November futures contract. The DTN National Soybean Index was therefore $7.59 bu.

Wheat:

The day-to-day direction of wheat futures trade may be following the usual indications from the U.S. dollar index -- when the dollar is lower, as it is Tuesday morning, wheat futures go higher. But not by much. It's more remarkable to note how stubbornly sideways the wheat charts have been moving. December Minneapolis spring wheat hasn't ventured outside of a 6-cent trading range since Thursday, centering around $5.88 bu. The benchmark Chicago wheat contract has remained between $5.05 and $5.31 1/4 since mid-September. DTN's collected SRW Index on Friday was $4.69 bu (39 cents under the December Chicago futures contract); the HRW Index was $4.71 (36 cents under the December Kansas City futures contract); and the Spring Wheat Index was $5.30 bu (stronger basis at 55 cents under the December Minneapolis contract)..

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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