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DTN Early Word Grains         12/06 06:00

   Grains Higher to Close the Week

   March corn is up 3/4 cent per bushel, January soybeans are up 4 1/4 cents, 
and March KC wheat is up 1/4 cent.

By Tregg Cronin
DTN Contributing Analyst

6:00 a.m. CME Globex:   March corn is up 3/4 cent per bushel, January soybeans 
are up 4 1/4 cents, and March KC wheat is up 1/4 cent.

CME Globex Recap:   Global equities are higher around the overnight with 
futures pointing toward a higher open in the U.S. ahead of the monthly payroll 
data later Friday morning. Average trade estimates are looking for November 
payrolls to show a gain of 184,000 jobs during the month, up from 128,000 in 
October. Growth of 184,000 would compare with the six-month average of 156,000. 
The November unemployment rate is expected to be unchanged at 3.6%, just above 
September's 50-year low of 3.5%. Grain markets are mostly higher overnight, led 
by soybeans, as some still believe we will see a trade deal before the December 
15. Without a trade deal, the U.S. is set to impose more tariffs on Chinese 
goods, although earlier this fall, President Trump suspended planned tariff 
increases to give negotiators more time. In the spirit of Christmas, there is a 
chance this could happen again if a breakthrough is not achieved. Harvest 
continues to plod along in the Northern Plains and will continue the rest of 
December and into 2020.

OUTSIDE MARKETS:   Previous closes on Thursday showed the Dow Jones Industrial 
Average up 28.01 at 27,677.79 and the S&P 500 up 4.67 at 3,112.76 while the 
10-Year Treasury yield ended at 1.797%. Early Friday, the December DJIA futures 
are up 59 points. Asian markets are higher with Japan's Nikkei 225 up 54.31 
(0.23%) and China's Shanghai Composite up 12.55 points (0.43%). European 
markets are higher with London's FTSE 100 up 52.17 points (0.73%), Germany's 
DAX up 26.13 points (0.2%) and France's CAC 40 up 21.79 points (0.38%). The 
December Euro is down 0.001 at 1.110 and the December U.S. dollar index is up 
0.044 at 97.415. The March 30-Year T-Bond is up 3/32nds, while February gold is 
down $3.30 at $1,479.80 and January crude oil is down $0.06 at $58.37. Soybeans 
on China's Dalian Exchange were up 0.09% while soybean meal was up 0.57%.



   BULL                                BEAR
1) Crude oil prices rose to the     1) Corn export commitments as a percentage
   highest level since September 23    of the USDA forecast at 30.2% is the
   on Thursday, supported by ideas     smallest on record going back to at
   of deeper production cuts by        least 1990.
2) According to Purdue University,  2) Producer selling in Argentina of corn,
   the Ag Economy Barometer rose to    soybeans and wheat has been reported as
   153 in November, tying the          elevated the last several weeks ahead of
   highest reading of 2019 on hopes    expected export tax increases as the new
   of a trade deal.                    administration takes office this week.
3) The U.S. Dollar Index fell to    3) DDGs exports during the month of October
   97.3550 overnight, the lowest       totaled 759,979 metric tons (mt), the
   trade in a month as the basket      smallest monthly total since February
   has closed lower five straight      and down 24% from last year.


   CORN  Corn prices are higher overnight, holding Thursday's lows and 
attempting to break the three-day slide dating to Tuesday. It's been a bit 
disheartening for corn bulls to see the entire post-Thanksgiving Day rally 
relinquished as weather remains mostly favorable in South America and export 
sales remain dismal. Export sales last week were just 21.4 mb vs. the 33.9 mb 
needed weekly to hit the USDA forecast. The 33.9 mb needed each week the rest 
of the marketing year would be the second largest average program since 2005 
and third largest since 1994. Total commitments of 574.3 mb are the smallest 
since the drought year of 2012 and the second smallest on record going back to 
1990. As a percentage of the USDA's estimate, the 30.2% this year is the lowest 
on record. One can dice this year's export program in a thousand different ways 
but they all point to the same conclusion: it's not good. Fortunately, we have 
had export programs enjoy better Q2-Q4 performances than what is needed this 
year but pushing the obligation down the road is always a risky proposition. 
Without a production stumble in either Brazil or Argentina this winter, the 
U.S. will face intense export competition in 2020 and struggle to reach the 
current 1.900 billion bushel target. Speaking of South American weather, 
Argentina will face severe dryness the next 7-10 days before rainfall picks up 
in week two of the current forecast. The GFS is pointing toward 100% of normal 
precipitation in Argentine growing areas December 12-18. Weeks three and four 
of the current CFS model is suggesting normal to above normal rains for 
Argentine corn growing areas as well which gets out to January 1.

   SOYBEANS  Soybeans are posting modest gains overnight, extending the rally 
effort to four days with the January contract up 11 1/2 cents on the week. If 
the corrective advance continues, some logical retracement targets would be the 
9.02 level which represents 38.2% of the entire 9.59-8.67 selloff. The 50% 
retracement level sits up at 9.13 1/2. Newswires like to point toward trade 
deal optimism as the impetus for the rebound, although we believe the market 
has become numb to the daily headline head fakes. It seems fairly obvious China 
is not going to impose the restriction of tying itself to a set dollar amount 
of soybean or general ag purchases. Likewise, it would seem foolish for the 
U.S. to remove the major bargaining chip it has in the way of tariffs before it 
can see China complying with the arrangements of the trade deal. In addition, 
China realizes they are only six weeks from new crop soybean harvest in Brazil 
and possibly 8-12 weeks from seeing Brazilian soybeans on their doorstep. Once 
that happens, it becomes all the more manageable for China to once again bypass 
U.S. soybeans in large measure as they did in 2018/19. Weekly export sales last 
week totaled 25.1 mb vs. the 21.0 mb needed weekly but were the lowest sales in 
six weeks. Total commitments of 953.1 mb are the second smallest since 2011 
while commitments as a percentage of the USDA forecast at 53.7% is well below 
the 63.2% average. Brazilian weather the next two weeks remains favorable with 
above normal precipitation and below normal temperatures expected through 
December 18. New highs for the move in the January board crush of $1.17 on 
Thursday which is the highest trade since June 14.

   WHEAT  Mixed wheat markets overnight with Chicago and Minneapolis posting 
light to moderate gains while Kansas City is steady. The rally in Chicago wheat 
since mid-November was impressive, but the strength in hard wheat remains 
lackluster. Since the November lows, March Minneapolis wheat is up just nine 
cents. Somewhat more encouraging was the surge in volume at the lows to the 
highest levels since August. With the managed fund community still holding a 
sizable net short position in Minneapolis, the spike in volume could have been 
a bout of profit taking. Those short positions in Kansas City and Minneapolis 
should be supportive to price moving forward as the selling has already 
occurred. Wheat export sales totaled 8.3 mb last week vs. the 13.2 mb needed 
weekly to hit the USDA forecast. Sales at that level were the lowest of the 
marketing year going back to June 1. Total commitments of 604.5 mb are up from 
last year's 547.1 mb but the second lowest since 2015. Census monthly export 
data for the month of October was released Thursday, posting 2.14 million 
metric tons (mmt), or 78.7 mb, which is the largest October export program 
since 2013/14. Other export data out Thursday included a Russian bulk handler 
estimating the country's wheat exports to total roughly 2.2 mmt, or 80.8 mb, 
which would be down from 3.52 mmt last year. If confirmed around that level, 
December exports would be the lowest for the month in five years. There were 
two deliveries in Kansas City overnight, zero in Chicago and 10 in Minneapolis 
as the December cycle is largely cleaned up.

              DTN Cash   Change From    National      Contract   Change from
Commodity     Index      Prev Day       Avg. Basis    Month      Prev Day
Corn:         $3.57      -$0.02         -$0.20        Mar        $0.000
Soybeans:     $8.25      $0.07          -$0.59        Jan        $0.008
SRW Wheat:    $5.15      -$0.02         -$0.08        Mar        $0.020
HRW Wheat:    $4.08      -$0.05         -$0.27        Mar        $0.001
HRS Wheat:    $5.02      -$0.01         -$0.12        Mar        $0.004


   Tregg Cronin can be reached at 

   Tregg can be followed throughout the day on Twitter @5thWave_tcronin 



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