DTN Closing Grain Comments

Corn, Wheat Encounter Resistance

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

General Comments:

Corn closed down 2 1/2 cents in the December contract and down 2 1/4 cents in the July. Soybeans closed up 3 cents in the November contract and up 4 1/4 cents in the July. Wheat closed down 9 1/2 cents in the December Chicago contract, down 7 3/4 cents in the December Kansas City, and down 8 cents in the December Minneapolis contract. The December U.S. dollar index is up .11 at 95.67. December gold is up $2.30 at $1,148.70 while December silver is up $.09 and December copper is up $.0130. The Dow Jones Industrial Average is up 82 at 16,872. November crude oil is down $.18 at $48.35. November heating oil is down $.0173 while November RBOB gasoline is down $.0299 and November natural gas is up .016.

Corn:

December corn closed lower Wednesday after bumping into resistance at the 200-day average and coming within a quarter-cent of the $4.00 mark. Weather conditions remain near ideal for row crop harvest in the Midwest with more warm and dry weather expected next week. USDA's October WASDE report has a good track record of providing more accurate crop estimates and will be taken seriously Friday, but unless there is a significant bearish surprise, the seasonal low for corn prices may already be in. Dow Jones's survey expects USDA to lower the production estimate from 13.58 billion to 13.46 billion bushels and the ending stocks estimate from 1.592 billion to 1.498 billion bushels. Given the favorable late-summer weather we have seen, those guesses may be a little low, but should not be too far off. December corn continues to trade in a sideways range with resistance at $4.00. DTN's National Corn Index closed at $3.64 Tuesday, priced 34 cents below the December contract and will stay above the 200-day average on Wednesday evening. Outside markets are relatively quiet with the U.S. dollar index up .11.

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Soybeans:

November soybeans closed modestly higher Wednesday for a third consecutive day, just shy of resistance at $9.00. Trading volume was low with traders showing caution in front of USDA's WASDE report on Friday. According to Dow Jones, analysts are expecting USDA to lower the U.S. soybean production estimate from 3.935 billion to 3.884 billion bushels. That is a bit odd, given the anecdotal reports of high yields around the country, but most of the guesses leaned lower, ranging from 3.59 billion to 3.99 billion bushels. Meanwhile, soybean planting is expected to be around 5% complete in Brazil. Central Brazil has been dry lately, but has better chances for rain this weekend. November soybeans have been holding steady for the past six weeks, between roughly $8.60 and $9.00. There is still a bearish risk that USDA's crop estimate may be larger than expected Friday, but if not, September's low of $8.53 1/4 should stand for the rest of the year. DTN's National Soybean Index closed at $8.31 Tuesday, priced 57 cents below the November contract and is still well below the 200-day average.

Wheat:

December Chicago wheat succumbed to selling Wednesday after coming within two cents of its 11-week high and 200-day average. Given this year's repeat of abundant world wheat supplies, it's a bullish surprise that wheat prices even reached these higher levels and the urge to sell is likely tempting for producers. Behind the latest rise are concerns of dry weather in Ukraine, Russia, and Australia with hot temperatures also stressing Australia's crop. Here in the U.S., winter wheat planting is going well, but growers could use more rain as the forecast is also dry for next week. December Chicago wheat continues to trade in a sideways range with resistance at $5.33. DTN's National SRW Wheat Index closed at $4.70 Tuesday, priced 57 cents below the December contract and near its highest price in two months. DTN's National HRW Wheat Index closed at $4.60 Tuesday, also near its highest price in two months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman