DTN Before The Bell Grains

Morning CME Globex Update:

Corn, soybeans, and wheat futures traded inside typically narrow price ranges overnight and kicked off Friday morning with mostly lower prices. The weekly export sales report showed 438,300 metric tons of wheat, 892,500 metric tons of corn, and 470,400 metric tons of soybeans sold in the week leading up to November 8.

Other Markets:

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

Corn:

During the early part of Friday's futures trade, corn prices are only about 3 cents lower than last week's close, emphasizing the market's neutral outlook in an overall environment of large supplies and stable demand. The U.S. corn harvest, which is in its final stretch despite disruptive precipitation across the northern edges of the Corn Belt, is likely to contribute 14.6 billion bushels of supply to the market once it's all said and done. Friday morning's export sales report showed a nice batch of U.S. feed grain business: 892,500 metric tons of corn sold and 34,600 metric tons of sorghum sold, mostly to Mexico. That corn figure is up 95 percent from the prior 4-week average. The DTN National Corn Index was $3.34 per bushel again Thursday, showing national average basis steady at 33 cents under the nearby futures contract.

Soybeans:

As a nationwide average, soybean basis bids tightened another penny Thursday, to 91 cents under the January futures contract, making 5 cents of total improvement since last week and echoing the 10 cents of basis strengthening noted in Gulf bids during that timeframe. It has been promising to see a few good chunks of soybean export business announced this week, but the weekly export sales report showed only a bearish 470,400 metric tons of soybean sales, which was at the low end of pre-report expectations. Overall U.S. barge traffic is running 12 percent lower than last year at this time, and 13 percent fewer ocean-going vessels are being loaded. Based on some tentative optimism about normalization for soybean shipping channels, soybean futures prices have been mostly stable lately, netting only 5-cent losses so far this week. And as long as there are still plans for the U.S. and Chinese presidents to meet up at the G20 summit on November 30, the U.S. soybean market will likely stay off fresh lows in the hope for that important relationship to be fixed. At8 a.m. USDA reported 100,000 mt of soybeans sold to unknown destinations for delivery in 2018-2019.

Wheat:

The weekly export sales report showed lackluster wheat sales at the low end of pre-report expectations: only 438,300 metric tons, and Chicago wheat futures are lower Friday morning alongside soybeans and corn. Only the smallest patches of 'Abnormally Dry' conditions and 'Moderate' drought still persist on the U.S. Drought Monitor map for the Southern Plains, and farther east in Soft Red Winter wheat country, those patches have disappeared during the past week of wet weather. Of course globally there are places where 2018/19 wheat supply concerns still exist: notably, Australia, which is currently harvesting its worst wheat crop in a decade. To make matters even worse, lightning storms late on Thursday sparked a series of fires in Western Australia, which are now burning thousands of acres of otherwise well-yielding mature wheat fields. Back in the U.S., basis bids for winter wheat varieties strengthened across the countryside again Thursday: DTN's collected SRW Index was $4.75 per bushel (31 cents under the December Chicago futures contract); the HRW Index was $4.52 (28 cents under the December KC futures contract); and the Spring Wheat Index was $5.32 per bushel (43 cents under the December Minneapolis futures contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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