DTN Before The Bell Grains

Morning CME Globex Update:

An Egyptian tender for December wheat has put some buying enthusiasm into nearby winter wheat futures, and double-digit gains are noted Friday morning despite the U.S. Dollar Index still moving upward. Soybean and corn prices are also higher, but by a smaller degree.

Other Markets:

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

Corn:

In aggregate, this week's corn data showed strong demand at the same time hundreds of millions of bushels of corn were harvested and added to supply. Thursday's losses put the December futures contract in a position of retesting the $3.60 1/4 low from earlier this month, but overnight trade has stabilized the market and put the chart back inside its previous trading range. With rain falling right now across the I-states, and additional light rain forecast for the northern Corn Belt over the weekend, elevators may not be expecting a particularly heavy flow of weekend bushels to arrive, and their typical Friday afternoon anticipatory futures selling could be relatively light. The DTN National Corn Index was $3.20 per bushel Thursday, showing national average basis steady at 41 cents under the December futures contract.

Soybeans:

The peak of 2018 soybean harvest pressure seems to be behind us now, as suggested by the slight tightening in countryside basis this week. The average bid was 99 cents under the November futures contract Thursday, putting the DTN National Soybean Index at $7.43 per bushel. Meanwhile, as commercial grain elevators look around and count the bushels they've received, the nearby November-to-January futures spread has tightened this week and now trades at 12 3/4 cents. Friday is the last trading day for November options. The far-right candidate for Brazil's presidency had been leading in the polls, but his lead has narrowed in recent days, and still the country's stock market and currency are in a wait-and-see standstill. That's one less source of outside volatility for U.S. soybean prices, but that could easily change next week. At 8 a.m. USDA reported 260,000mt of soybeans sold to unknown destinations; 200,000mt for 2018-2019 delivery & 60,000mt for 2019-2020 delivery.

Wheat:

Wheat futures have been whipped around this week; after losses on Monday and Wednesday, contracts dropped by double digits Thursday and are presently back up by double digits Friday morning. Ostensibly, wheat's losses were the result of volatile gains in the U.S. dollar while outside market investors flee into "safe" assets. A stronger dollar urges export traders to shade their offers in domestic flat price terms. But the dollar is higher once again on Friday, and still the U.S. wheat price has been able to rise. Kansas City and Chicago December wheat contracts have experienced strong trading volumes so far Friday morning (not the case for Minneapolis spring wheat futures), and the enthusiasm may be related to Egypt's tender for wheat to be delivered in December. DTN's collected SRW Index on Wednesday was $4.51 per bushel (36 cents under the December Chicago futures contract), the HRW Index was $4.51 (36 cents under the December KC futures contract), and the basis bids for spring wheat continued to strengthen, averaging 53 cents under the December Minneapolis contract, putting the Spring Wheat Index at $5.17 per bushel.

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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