DTN Early Word Grains

EARLY MORNING GLOBEX NET CHANGES: December corn is steady, November soybeans are down 4 1/4 cents, December KC wheat is down 3 1/4 cents, December Chicago wheat is down 3 1/2 cents, and MIAX December Minneapolis wheat is down 0.0075 cents.

CME GLOBEX RECAP: Soybeans closed slightly higher on Monday, while corn and wheat ended slightly lower. SRW wheat and HRW wheat basis were steady on Monday, while corn and spring wheat basis were weaker. Outside of anecdotal corn and soybean yield reports, estimates of how harvest progress might be going, traders have little to decide the price direction for corn and soybean markets. For wheat, global crop estimates keep going higher, pressuring the market. Monday’s Export Inspection Report was delayed until Tuesday due to the Columbus Day holiday. Therefore, the farm markets remain in a choppy pattern. The news on Monday that President Trump and China’s President Xi Jinping will still meet later this month, despite threats of increased tariffs on Chinese imports, keeps traders hopeful of a soybean trade agreement. On Tuesday, Beijing announced a ban on Chinese companies from doing business with U.S. subsidiaries of a South Korean shipbuilding giant.

OUTSIDE MARKETS: Previous closes on Monday showed the Dow Jones Industrial Average up 587.98 at 46,067.58 and the S&P 500 up 102.21 at 6,654.72. The 10-Year Treasury yield ended at 4.051%. Early Tuesday, the December Dow Jones Futures are down 284 points. European markets are lower with the spot futures of London’s FTSE 100 trading down 0.28%, spot futures of Germany’s DAX are trading down 1.01% and the spot futures of France’s CAC 40 Index are down 0.92%. Asian markets are lower, with Japan’s Nikkei 225 Index down 1.02% and China’s Shanghai Composite Index down 0.62%.

The December Euro is down 0.001 at 1.160, and the December U.S. Dollar Index is up 0.125 at 99.155. The December 30-Year T-Bond is up 26/32nds, while December gold is up $14.20 at $4,147.20, and November crude oil is down $1.34 at $58.15. On China’s Dalian Exchange, November corn was down 0.95% while November soybeans were down 0.28%, January soybean meal was down 0.82% and December Malaysian Palm Oil was trading down 0.87%.

MORE COMMODITY-SPECIFIC COMMENTS

Corn futures are steady early Tuesday, with the December contract at $4.10 1/4 per bushel. The national average basis for corn was 1 cent weaker at 41 cents under the December futures contract, while the DTN National Corn Index was down 3 cents at $3.70. Technically, December corn futures failed to move above the 50-day moving average on Monday at $4.15. A sustained hold above the 50-day average sets the $4.00 to $4.05 area as a bearish target for the move. Fundamentally, the corn market is supported by lower-than-expected yield reports in the Corn Belt, firming price spreads between the December and 2026 contracts, and higher basis values. Exports are strong, to start the new marketing year, but the government shutdown is keeping that data in the dark. 

Soybean futures are down 4 1/4 cents early Tuesday, with November at $10.03 per bushel. The national average basis for soybeans was steady at 76 cents under the November futures contract, while the DTN National Soybean Index increased by 1 cent to $9.32. Technically, November futures dipped within 3 cents of the $10.00 mark on Monday. That price support level has been in place since early August. The next support level is $9.90, or the early August lows. Fundamentally, ongoing trade tensions between the U.S. and China keep a cautious tone over the soybean market and the prospects of soybean sales resuming with the Asian giant. Yield reports remain inconsistent, providing no clear price direction. Overall, exports for the new marketing year are bearish. Meanwhile, Brazil’s farmers, although slowed in planting their new soybean crop last week—at 21% complete compared to a 17% normal pace, remain ahead of schedule.

Wheat futures are down 3 3/4 cents early Tuesday morning, with December contracts at $4.92. The national average basis for hard red winter (HRW) wheat was steady at 70 cents under the December futures contract, while the DTN National Hard Red Winter Wheat Index was down 2 cents at $4.11. The national average basis for hard red spring (HRS) wheat was 1 cent weaker at 40 cents under the MIAX Minneapolis December futures contract, and the DTN National Hard Red Spring Wheat Index was down 1 cent at $5.11. Technically, the December KC futures contract nears five-plus year lows, with support at $4.80. Through the summer, the wheat market ignored chart signals. Fundamentally, the wheat market struggles to get past growing crop estimates globally. The U.S. dollar, rising to 2 1/2-year highs, is pressuring wheat exports. Export sales reports, delayed due to the government shutdown, don’t allow traders to use that strong data to underpin a market that is looking for bullish news.

CORN:

SOYBEANS:

WHEAT: