DTN Closing Grain Comments

General Comments:

Corn was down 1 cent in the December contract and down 1 1/4 cents in the July. Soybeans were down 4 3/4 cents in the January contract and down 3 1/2 cents in the July. Wheat closed down 5 3/4 cents in the December Kansas City contract, down 1 3/4 cents in December Chicago, and down 7 3/4 cents in the December Minneapolis contract. The December U.S. dollar index is down 0.26 at 95.86. December gold is up $1.80 at $1,228.10 while December silver is up 7 cents and December copper is up $0.0105. The Dow Jones Industrial Average is up 409 points at 26,050. December crude oil is down $0.42 at $61.79. December heating oil is up $0.0510 while December RBOB gasoline is down $0.0420 and December natural gas is down 0.011.

Corn:

Tuesday's elections brought change to the national political landscape, but last I checked the sun still came up and there is still work to do. Each political party boasted some victories, but overall, grain prices were lower on the day, more concerned about the same old challenge of what to do with these bountiful supplies. December corn ended down a penny at $3.72 1/4 Wednesday, another quiet day of trading ahead of Thursday's WASDE report, due out at 11 a.m. CST. If Dow Jones' survey is correct, USDA's corn harvest and U.S. ending stocks estimates will be trimmed a little lower, but no big changes are expected. World ending-corn stocks still are expected to be down roughly 20% in 2018-19 from a year ago, an estimate that should continue to give corn prices some backbone after harvest is over. For now, the trend in corn remains up as we head toward a quieter time of year. DTN's National Corn Index closed at $3.37 Tuesday, well above its September low of $3.00 and priced 37 cents below the December contract. In outside markets, the U.S. dollar index is down 0.26 after Tuesday's election and the Dow Jones Industrials are trading up 409 points.

Soybeans:

January soybeans closed down 4 3/4 cents at $8.79 1/2 Wednesday, sagging in front of Thursday's WASDE report where some bearish adjustments could be waiting. The main bearish concern for soybeans is the lack of export business in 2018-19 without China and there is a chance that USDA's actual estimate of U.S. ending-soybean stocks turns out higher than the 900 million bushels Dow Jones' survey expects. The other bearish adjustment that would not surprise many would be for USDA to lower its estimate of China's soybean imports, currently sitting even with the previous year at 94.00 mmt (3.45 bb). In fact, USDA's attache advised an 85.0 mmt estimate on Monday. On the bullish side and related to this fall's wet harvest, USDA could reduce its estimate of the U.S. soybean harvest lower than the 4.676 bb that Dow Jones' survey anticipates. A large change does not seem likely, but a 50 mb to 100 mb reduction would not be unreasonable. With plenty of unanswered questions about U.S. soybean demand and, in spite of a bearish start in Brazil, soybean prices continue to trade in a sideways range, well above their September low. DTN's National Soybean Index closed at $7.85 Monday, priced $0.99 below the January contract and still well above the September low of $7.12. There were 249 delivery intentions of November soybeans issued late Tuesday. 3,788 November contracts were open as of early Wednesday.

Wheat:

December K.C. wheat ended down 5 3/4 cents at $5.02 1/4, giving back Tuesday's gain and having a difficult time generating buying enthusiasm. Thursday's WASDE report is not expected to show much change in the supply and demand estimates for wheat, but a surprise is always possible, even in November. Wheat shares one bearish risk in common with soybeans, which is the appalling lack of exports in 2018-19, down 21% from last year's miserable performance. As bearish as that sounds however, USDA's report will remind traders again that world wheat production and ending stocks are both expected to be modestly lower in 2018-19. Here in the U.S., colder temperatures are making their way south with lows falling below freezing in Kansas from Thursday through Saturday. As trading in wheat gets quieter this time of year, all three wheat prices remain under pressure, but are holding sideways. DTN's National HRW Index closed at $4.76 Tuesday, 32 cents below the December contract and holding above support at $4.50. Similarly, DTN's National SRW Index closed at $4.78 Tuesday.

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

Follow him on Twitter @ToddHultman1

(CZ)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.