DTN Closing Grain Comments

Corn, Wheat Lower After USDA Report

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn closed down 8 1/2 cents in the December and down 7 3/4 cent in the July. Soybeans closed up 4 1/2 cents in the November and up 4 1/2 cents in the July. Wheat closed down 2 1/4 cents in the December Chicago, down 3 1/4 cents in the December Kansas City, and down 1 1/2 cents in the December Minneapolis.

The December U.S. dollar index is down .51 at 94.90. December gold is up $11.50 at $1,155.80 while December silver is up .05 and December copper is up $.0710. The Dow is down 14 at 17,036. November crude oil is down $.25 at $49.18. November heating oil is $.0218 lower, November RBOB gasoline is $.0032 lower, and November natural gas is $0.017 higher.

For the week:

December corn closed down 6 1/2 cents while July closed down 5 cents. November soybeans were up 11 1/2 cents while the July was up 14 cents. December Chicago wheat was down 4 cents, December Kansas City wheat was down 1/4 cent, and December Minneapolis wheat was up 2 1/4 cents.

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Corn:

December corn closed lower after USDA's estimate of U.S. ending corn stocks was higher than expected at 1.561 billion bushels. U.S. production in 2015 was estimated at 13.555 billion bushels and was also a little more than expected. USDA reduced harvested acres by 400,000 and increased the yield estimate by .5 to 168.0 bushels an acre. Domestic demand estimates were kept unchanged for the new season. USDA's estimate of world-ending corn stocks for 2015-16 was reduced from 189.69 to 187.83 million metric tons, less than expected and aided by a 2-mmt reduction for Ukraine's production. Overall, corn's numbers were neutral-to-bearish Friday, but support the argument that the Aug.12 WASDE-washout should stand as the low for the year. December corn continues to trade sideways with resistance at $4.00. The DTN National Corn Index closed at $3.58 Thursday, priced 34 cents below the December contract and slightly above the 200-day average. In outside markets, the U.S. dollar index is down .51, seeing more selling after Thursday's bearish comments from the minutes of the latest Federal Reserve meeting.

Soybeans:

November soybeans closed modestly higher after USDA reduced the production estimate from 3.935 to 3.888 billion bushels, close to expectations. The yield estimate inched up from 47.1 to 47.2 bushels an acre, but was overshadowed by a 1.1 million acre reduction in the estimate of harvested acres, the result of early-summer rains. USDA's estimate of U.S. ending stocks was also reduced, from 450 to 425 million bushels, but was more than expected due to a 50-million bushel reduction in the export estimate -- an adjustment that probably won't stand as the year progresses. Earlier Friday, USDA announced that China bought 13.2 million bushels of U.S. soybeans for 2015-16. For the world, USDA slightly increased its estimate of ending stocks from 84.98 to 85.14 mmt, influenced by a 3-mmt increase in Brazil's production estimate for 2016. While Friday's soybean numbers were not significantly bullish, they did provide relief from the most bearish concerns and supported notions that the September low of $8.53 1/4 should hold for the rest of the year. The DTN National Soybean Index closed at $8.25 Thursday, priced 57 cents below the November contract and will stay below the 200-day average on Friday evening.

Wheat:

December Chicago wheat closed modestly lower after USDA reduced its estimate of U.S. ending wheat stocks for 2015-16 from 875 to 861 million bushels, a higher-than-expected result that included a 50-million bushel reduction in the export estimate. The lower production estimate of 2.052 billion bushels was anticipated after the Sept. 30 Grain Stocks report and included a 1.4 million acre reduction in harvest acres and lower yield of 43.6 bushels an acre. USDA's estimate of 2015-16 world ending wheat stocks was increased, from 226.56 to 228.49 mmt, and was more than expected. Production increases were posted for Canada, Europe, and Ukraine -- all believable. The oddity showed up in Australia where production was increased from 26.0 to 27.0 mmt in spite of their current challenges with hot and dry weather. Broadly speaking, there is no argument that global wheat supplies are plentiful. December Chicago wheat continues to trade in a sideways range with resistance at $5.33, the August high. The DTN National SRW Wheat Index contract closed at $4.57 Thursday, priced 57 cents below the December contract and below the 200-day average. The DTN National HRW Index closed at $4.48, also below the 200-day average.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman