Soybeans and Corn Bounce Back; Wheat Is Slightly Firmer

CME GLOBEX RECAP:

December corn is up 1 1/4, November soybeans are up 3 1/2. December KC wheat is up 1 1/4, Dec Chicago wheat is up 1 1/4, and December MIAX Minneapolis wheat is up .0200.

OUTSIDE MARKETS:

December corn is up 1 1/4, November soybeans are up 3 1/2. December KC wheat is up 1 1/4, Dec Chicago wheat is up 1 1/4, and December MIAX Minneapolis wheat is up .0200. The Dow Jones Industrials Index rose 218 points on Tuesday and Dow futures are down 2 points early Wednesday. November crude oil is up $1.24 per barrel. The U.S. Dollar Index is up .195 and November gold is down another $46.40 an ounce.

CORN:

December corn futures are bouncing back a bit early Wednesday following Tuesday’s weak close. December is again challenging and trading just above the 100-day moving average. Three of the widely watched moving averages — the 20-day, 50-day and 100-day are all within 3 cents. Tuesday’s weakness was attributed to better farmer selling as corn is now being piled on the ground in many places in the western and north-central Midwest. There is a general feeling that corn yield is now trending well below the initial USDA estimate of 188 bushels per acre (bpa), with traders feeling that yield could fall into the 180-185 bpa range. A prominent ag advisory firm has settled on 184.2 bpa. Nonetheless, it will still be a huge crop and with an estimated 6 billion bushels (bb) yet to be harvested some storage issues are sure to occur. U.S. demand remains solid, although no government export sales reports or flash sales have been announced as the U.S. government is now officially in day 22 of the shutdown and the second longest on record. Corn inspections have risen 61% above year ago levels, giving a hint that demand is still solid. The ethanol industry suffered a setback Tuesday when the American Petroleum Institute came out against the adoption of national E15 mandates. On Wednesday, the EIA will be out with their weekly petroleum status report and ethanol production will be closely watched. In the past three weeks, it has trended higher as seasonal downtime ended. In South America, weather could not be more favorable with showers headed for Argentina and southern Brazil for the next 5-6 days and then moving into central and northern Brazil. Argentine corn planting has now reached 35% done. Uncertainty continues to reign with respect to the Trump and Xi meeting on trade in South Korea as China has yet to confirm that schedule. Funds enter Wednesday holding a net-short position estimated to be 95,000 contracts. DTN’s National Corn Index closed at $3.80 and 40 cents below the December contract.

SOYBEANS:

After closing lower, but only by a penny, for the first time in 6 days, November beans are once again higher and have popped up over the 100-day moving average again. Soymeal is mixed to lower while bean oil futures are getting help from the crude oil bounce as the Trump administration has promised to refill the oil reserve. There remains a lot of uncertainty with respect to trade talks with China. As Secretary Scott Bessent and other U.S. trade representatives are slated to meet with Chinese counterparts Friday in Malaysia, the much-advertised Trump-Xi meeting is still in doubt next week with no confirmation yet from China. South American weather remains beneficial with rain projected for both Argentina and Brazil over the next 15 days. CONAB reports that Brazil soy planting has reached 22% compared to less than 18% a year ago. Major producing state is thought to be closer to 45% seeded and well above average. Brazil is still very actively shipping old-crop soy with October exports estimated to be 7.34 million metric tons (mmt) compared to just 4.4 mmt a year ago. The U.S. has still not sold any new-crop soy to China, and with needs estimated at just 6 mmt to 9 mmt before new-crop Brazilian beans start flowing in late January, the U.S. window for sales is very narrow. In other news, the U.S. dollar is higher, and gold continues its dramatic plunge from the high, having fallen the most in one day since 12 years ago, and from the high Tuesday had cratered roughly $350 per ounce early Wednesday. Next week, the Federal Reserve is expected to again lower interest rates. November beans are approaching overbought, but the market attempts to finish higher for the fifth time in the past six days. DTN’s National Soybean Index closed at $9.58 with a soybean basis of 73 under the November futures.

WHEAT:

Wheat continues to feel pressure from the ever-growing world wheat supplies, but early Wednesday is catching a bid in all three markets. The MIAX Minneapolis market is extremely oversold but has already set two new contract lows this week. While it seems that all major exporters have reported rising production in the past few weeks, the Southern Hemisphere harvest is set to commence in November. Argentina, which is forecast to have a record supply on hand with the record crop of 23 mmt augmented by a record carry in of close to 5 mmt, had FOB values fall to just $208-$210. That is an estimated $16 to $18 per metric ton cheaper than Gulf hard winter values. Also, Russia’s wheat yield, on the heels of the surprisingly good spring wheat yields will set a record. There is also talk that Australia’s wheat crop could ultimately rise to 36 mmt to 37 mmt compared to 34.1 mmt last year. Weather forecasts have a system set to move into the Southern Plains with more showers on Thursday. U.S. winter wheat planting is estimated to be nearing 75% to 80% done. Wheat is oversold and funds are short, but there has been very little good news of late for wheat bulls. DTN’s National HRW Index closed at $4.16 and 69 under the December futures board.

Dana Mantini can be reached at Dana.Mantini@dtn.com