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GRAIN MARKETS: Grains start holiday week with small adjustments

Monday dishes mixed results; corn higher, soybeans and wheat lower.

By Ben Potter

Short covering and positive trade news was enough to give corn prices a small lift. Soybeans, meantime, held steady for much of the day, finishing down less than one-tenth of 1% by the close. Wheat prices retreated as the U.S. dollar climbed and export worries crept back into the conversation.

Tuesday’s weather will be varied across the Plains and Midwest, but generally more western areas will capture warmer temperatures, with seasonally cool weather prevailing further east. Little to no precipitation is expected for Tuesday, save for some light accumulation in northern Minnesota. Northern California and the Pacific Northwest will receive ample rainfall and snowfall tomorrow, meantime.

The Dow caught a rebound, trading around 100 points higher in early afternoon trading Monday, lifted by strong performances in the industrial and technology sectors. The stock market’s continued upward mobility will be highly dependent on whether the Senate will be able to forge a passable tax bill, which will currently not be voted on until sometime after Thanksgiving.

Corn prices went higher for the second straight session, on minor U.S. harvest rain delays and a round of short covering. Gains were modest; December futures finished 2 cents higher to close at $3.45, and March 2018 futures were up 1.5 cents to close at $3.5650.

Corn export inspections came in on the high end of trade guesses (19 million to 27 million bushels), with 24.9 million bushels. That was well above last week’s total of 15.7 million bushels but lagged behind a total of 34.5 million bushels this week a year ago. The weekly rate needed to meet USDA’s forecast is now up to 28.7 million bushels, and the year-to-date totals for the 2017/18 marketing year is still well behind the pace set a year ago, with 259 million bushels versus 462 million bushels. Mexico was the top export inspection destination.

Ahead of Monday afternoon’s USDA Crop Progress report, a group of 10 trade analysts estimates the corn harvest has progressed to 91% complete, up from 83% complete a week ago. Farm Futures, which participates in the surveys, estimates harvest has reached 89% completion.

Preliminary volume estimates were for 593,746 contracts, down moderately from Friday’s total of 671,550.

Soybean prices nearly recaptured overnight losses, with January futures losing a half-cent to close at $9.90, and March futures keeping above the $10 mark, finishing down a quarter-cent to close at $10.0125. Trade that was slower from a year ago, coupled with losses in soyoil, both played a factor.

Soybean weekly export inspection volume of 78.3 million bushels was on the high end of trade guesses that ranged between 66 million and 80 million bushels. Even so, volume was down slightly from the week prior (80.3 million bushels), and moderately from a year ago (98.3 million bushels). Year-to-date totals for the 2017/18 marketing year, which began September 1, are up to 705 million bushels – down from 2016/17’s pace of 806 million bushels. China captured nearly 80% of the week’s total volume.

Ahead of Monday afternoon’s USDA Crop Progress report, a group of 10 trade analysts estimates soybean harvest is now 97% complete, up from 93% a week ago. Farm Futures, which participates in these surveys, estimates soybean harvest is 96% complete.

South Korea issued tenders for the purchase of a total of 6.2 million bushels of non-GMO soybeans, for delivery between January and August of 2019.

Preliminary volume estimates were for 133,174 contracts, down moderately from Friday’s total of 178,830.

Wheat prices were tripped up by meager export volume news and a firming of the U.S. Dollar, with most prices falling between 1.3% and 1.5%. December Chicago SRW prices fell 5.25 cents to close at $4.22, and December Kansas City HRW futures dropped 6.25 cents to close at $4.2575. MGEX Spring Wheat prices also took a tumble, with December futures falling 7.75 cents to close at $6.2575.

Wheat weekly export inspections barely made the low end of the trade guess range (9 million to 16 million bushels), with 9.5 million bushels. That’s down slightly from last week’s total of 11.3 million bushels and well behind the total of 15.9 million bushels this week a year ago. The rate needed to meet USDA’s forecast now stands at 19.3 million bushels, and year-to-date totals for the 2017/18 marketing year, which began June 1, has reached 441 million bushels.

A group of 10 trade analysts estimate that 54% of the 2017/18 U.S. winter wheat crop is rated good to excellent, unchanged from a week ago. USDA will provide an updated estimate of crop conditions later Monday afternoon.

In Ukraine, crop condition estimates are improved from a year ago on improved topsoil moisture levels. Ukraine will harvest upwards of 27.8 million acres of winter crops for 2017/18, including 15.1 million acres of winter wheat.

Ethiopia has issued an international tender to purchase 2.6 million bushels of milling wheat, with a deadline of December 5. The tender will be financed by various aid agencies to help the country, which is struggling with food production due to ongoing drought.

Preliminary volume estimates were for 154,501 CBOT contracts, which was slightly up from Friday’s total of 140,327.

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