DTN Before The Bell Grains

Morning CME Globex Update:

The falling crude oil market plumbed new depths overnight and is down 84 cents per barrel Tuesday morning. This puts most commodity markets, including corn and wheat, in a bearish light, but soybeans seem to be pursuing their own independent path this week.

Other Markets:

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

Corn:

The market must wait an extra day for Sunday's Crop Progress numbers to be released Tuesday afternoon, but it's widely assumed that nationwide corn harvest progress is approaching 90 percent complete by now. There are sunny skies across almost all of the Corn Belt Tuesday, with the exceptions of Ohio and Michigan, and the weather forecast continues to suggest cold but clear weather for the near future. Corn futures prices, therefore, have no reason to develop major momentum in either direction at the moment. The December 2018 contract is lingering around the $3.70 level and the December 2019 contract is trading above $4 per bushel. The DTN National Corn Index was $3.37 per bushel Monday, showing national average basis stronger at 34 cents under the December futures contract.

Soybeans:

Soybean planting in Argentina has been disrupted by heavy rains, which is somewhat bullish to deferred global soybean prices, but perhaps not bullish enough to explain Chicago futures' independently higher movement Tuesday morning. Nearby futures spreads remain wide and stable (the January-to-March spread at 13 1/2 cents), suggesting the commercial outlook for soybean supplies remains unchanged. Rather, it may be currency fluctuations that are driving soybean prices this week: soybeans were lower Monday when the dollar was streaking higher, and now soybeans are higher Tuesday when the dollar is pulling back lower. It's unlikely the market will pursue fresh lows this month while it waits to see how a meeting between the U.S. and Chinese presidents turns out at the G-20 Summit on November 30. There were 247 issues and stops of expiring November futures contracts. The DTN National Soybean Index was $7.89 per bushel Monday, showing national average basis at $0.95 under the January futures contract. Basis continues to get stronger day by day, but it's still historically weak due to the U.S.-China trade war. At this time last year, national average basis was 15 to 20 cents stronger across the countryside. At 8 a.m. USDA reported 276,732 mt of soybeans were sold to unknown destinations for delivery in 2018-2019.

Wheat:

Short-covering put the Chicago wheat futures contract in a leadership position Monday, pulling KC, Minneapolis, and foreign wheat markets upward as well, and now Chicago seems to be the leader of the pullback, with 5-cent losses Tuesday morning. As of the latest CFTC measurement, speculative 'managed money' traders were holding 1.5 times as many short Chicago wheat futures positions as long positions, but total open interest has fallen precipitously during the past four sessions of active trading. DTN's collected SRW Index on Monday was $4.88 per bushel (32 cents under the December Chicago futures contract); the HRW Index was $4.63 (31 cents under the December KC futures contract); and the Spring Wheat Index was $5.38 per bushel (45 cents under the December Minneapolis futures contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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