DTN Closing Grain Comments

Grains Survive Bearish Outside Markets

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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General Comments:

December corn was down 1 cent and July corn was down 1 cent. January soybeans were up 7 1/4 cents and July soybeans were up 7 cents. March K.C. wheat closed down 1 1/2 cents, March Chicago wheat was up 2 cents, and March Minneapolis wheat was up 3/4 cent. The December U.S. dollar index is up 0.67 at 96.74. December gold is down $3.80 at $1,221.50 while December silver is down 13 cents and December copper is down $0.0470. The Dow Jones Industrial Average is down 557 points at 24,460. January crude oil is down $3.74 at $53.46. January heating oil is down $0.0971 while January RBOB gasoline is down $0.0923 and January natural gas is down 0.174.

Corn:

December corn fell a penny to $3.61 1/4 Tuesday and it is probably no shock to learn that trade volume was light two days before Thanksgiving. With 10% of the corn crop still standing as of Sunday, there is still work to do and, except for some snow in northern Wisconsin, Tuesday's weather is dry across the central Plains and is expected to stay mostly dry the next five days. The better chances for rain are east of the Mississippi River and east of Indiana. While corn exports are off to a strong start, sales have slowed lately. Early Tuesday, USDA reported a cancelled sale of 7.9 million bushels (200,588 mt) of U.S. corn to unknown destinations for 2018-19. It seems concerns about slower world growth pressuring the stock market are also part of the sluggishness affecting corn. In spite of the recent sag in corn prices, the trend remains sideways. DTN's National Corn Index closed at $3.30 Monday, well above its September low of $3.00 and priced 32 cents below the December contract. In outside markets, the December U.S. dollar index is up 0.67, seen as a safe haven Tuesday while stocks trade lower a second day. Nearly all commodities outside of grains were lower Tuesday afternoon.

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Soybeans:

January soybeans closed up 7 1/4 cents at $8.81 Tuesday, gaining back part of Monday's 18 1/2 cent loss without much effort as trade volume was light. December soybean meal also showed a modest bounce, closing up $1.60 at $307.10 on light volume as prices remain reluctant to break the September low of $301.60. Will they or won't they continues to be the dominant question for soybean prices, referring of course to a possible trade agreement between the U.S. and China. For an excellent perspective on the trade dispute, please do yourself a favor and read Monday's blog by DTN Editor Emeritus Urban Lehner, "The U.S. and China Near the Brink." A clear winner seems unlikely and the current standoff may come down to whether or not there is enough compromise from each side to reach a deal they can both accept. It is still not clear if any deal will be reached in 2018 and the uncertainty of it all makes it more difficult than usual to trust the soybean market at almost any price. Meanwhile, Brazil continues to show a lot of rain in the seven-day forecast and there may be too much in some areas. Earlier Tuesday, USDA said 4.5 million bushels (123,567 mt) of U.S. soybeans were sold to unknown destinations for 2018-19. In spite of all the uncertainty over trade, the trend in soybeans remains sideways, helped by Tuesday's partial rebound. DTN's National Soybean Index closed at $7.84 Monday, priced $0.90 below the January contract and still above the September low of $7.12.

Wheat:

March K.C. wheat ended down 1 1/2 cents at $4.97 1/4, still showing pressure from noncommercial liquidation, which is a hangover from this summer's buying excitement related to Europe's dry conditions. Overall, this tends to be a quieter time of year for wheat prices and there hasn't been much U.S. export business to get excited about lately. All wheat exports are down 20% from a year ago and HRW exports, in particular, are down 42% in 2018-19 from a year ago. Perhaps the best news for K.C. wheat prices is that noncommercial net longs are down from 69,331 in late August to 17,655 as of last Tuesday so the pressure to liquidate should be slowly subsiding. Based on cash prices, SRW wheat and spring wheat continue to trend sideways, while the trend in HRW wheat turned lower on Monday's close. DTN's National HRW Index closed at $4.48 Monday, 28 cents below the December contract and fell below support at $4.50. DTN's National SRW Index closed at $4.68 Monday and is still above its support.

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

Follow him on Twitter @ToddHultman1

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Todd Hultman