DTN Early Word Grains

DTN Early Word Grains

EARLY MORNING GLOBEX NET CHANGES: December corn is down 1 cent per bushel, November soybeans are down 7 1/4 cents, December KC wheat is down 5 1/4 cents, December Chicago wheat is down 6 1/4 cents, and MIAX December Minneapolis wheat is down 0.0725 cents.

CME GLOBEX RECAP: Corn, soybean, and wheat futures closed higher on Friday, driven by end-of-month short-covering. After a long holiday weekend, traders turn the calendar. Friday’s strong finish was largely supported by technical factors. However, the market remains cautious due to widespread southern rust being found in Midwestern cornfields. The uncertainty increases as the rust intensifies in the final growth stage. August was a dry month for the Eastern Corn Belt and the southern part of the Corn Belt for soybeans. Will the price momentum from late August carry into September? We’ll soon see. Some forecasts predict temperatures that could support a light frost this Thursday in parts of Iowa, Illinois, and Minnesota. 

OUTSIDE MARKETS: The previous close Friday showed the Dow Jones Industrial Average down 92.02 at 45,544.88 and the S&P 500 down 41.60 at 6,460.26. The 10-Year Treasury yield ended at 4.227%. Early Tuesday, the September Dow Jones Futures are down 184 points. European markets are lower with the spot futures of London’s FTSE 100 trading down 0.3%, spot futures of Germany’s DAX are trading down 1.07% and the spot futures of France’s CAC 40 Index are down 0.01%. Asian markets are mixed, with Japan’s Nikkei 225 Index up 0.29% and China’s Shanghai Composite Index down 0.45%. The September Euro is down 0.006 at 1.165, and the September U.S. Dollar Index is up 0.605 at 98.295. The December 30-Year T-Bond is down 28/32nds, while December gold is up $31.80 at $3,547.90, and October crude oil is up $1.90 at $65.91. On China’s Dalian Exchange, November corn was up 0.73% while November soybeans were up 0.2%, January soybean meal was down 0.13% and November Malaysian Palm Oil was trading up 2.26%.

MORE COMMODITY-SPECIFIC COMMENTS

CORN:

Corn futures traded 1 1/2 cents lower early Tuesday morning, with the December contract at $4.18 1/2 per bushel. The national average basis for corn Friday was 1 cent stronger at 41 cents under the December futures contract, while the DTN National Corn Index was up 11 cents at $3.79. There is carry in the market, which signals to farmers the market isn’t currently demanding corn. That could become a sticky issue once the combines start rolling. Farmers, sharpening their pencils on their post-harvest marketing plans, will need to decide whether storing the new crop and selling it later will be profitable. The month of September will be very telling for U.S. farmers expecting a large crop. Trader positioning (as of Aug. 26) in the latest Commitments of Traders report shows money managers cut a gross 7,242 short positions last week (betting prices will fall) and remain net-short 110,686 contracts overall. Commercial traders (producers, merchants, processors, and end-users) hold net short positions of 87,239 contracts.

SOYBEANS:

Soybean futures are down 8 3/4 cents early Tuesday, with November at $10.45 3/4 per bushel. The national average basis for soybeans on Friday was 1 cent weaker at 72 cents under the November futures contract, while the DTN National Soybean Index increased 6 to $9.83. Trade tariffs just took front-and-center stage. On Friday, a U.S. Court of Appeals for the Federal Circuit ruled President Donald Trump’s global tariffs are illegal. If the ruling stands, some trade agreements may need to be renegotiated. On Friday, the Commitments of Traders Report showed money managers were net-long the soybean market by 20,818 contracts. Producers, processors, merchants, and end users are collectively net-short by 124,515 contracts. Money managers are net-short in soybean meal futures and options by 61,711 contracts, while holding a net-long position in soybean oil of 30,669 contracts.

WHEAT:

Wheat futures are trading 7 1/2 cents lower early Tuesday morning, with December contracts trading at $5.26 3/4 per bushel. On Friday, the national average basis for hard red winter (HRW) wheat was 3 cents stronger at 70 cents under the December futures contract, while the DTN National Hard Red Winter Wheat Index was up 7 cents at $4.50. The national average basis for hard red spring (HRS) wheat was 1 cent stronger at 50 cents under the MIAX Minneapolis December futures contract, and the DTN National Hard Red Spring Wheat Index was up 4 cents at $5.30. The latest Drought Monitor update showed 31% of the U.S. winter wheat area is in drought, compared to 47% a year ago. The impacted area is the hard red territory in the Southern Plains. The market will eye the south and east areas of soft red wheat for planting conditions over the next couple of months. On Friday, the Commitments of Traders Report showed money managers are net-short the soft red wheat futures and options markets by 81,587 contracts.