DTN Grain Open: Markets Consolidate, Bounce on Crop Immaturity

Corn field. Photo: K-State Research and Extension - Creative Commons

6:00 a.m. CME Globex: December corn is up 2 1/2 cents per bushel, November soybeans are up 7 cents, and September K.C. wheat is up 1/4 cent.

CME Globex Recap: Mixed equity trade overnight as concerns over a slowing U.S. and global economy persist. On Monday, President Trump tweeted the Federal Reserve should cut interest rates by 100 basis points (bp), a much larger cut than he has previously called for. To be clear, the Federal Reserve hasn’t cut interest rates by 100 bp since the Great Recession in 2007/08.

The great irony here is the demand for lower interest rates might not be necessary if the global economy wasn’t being forced to deal with the U.S.-China trade war. Overnight, China set a newly minted benchmark lending rate six bp lower at 4.25% as they too try to keep monetary conditions loose amid the worsening trade row.

Grain markets are mostly higher overnight as row crop prices consolidate just above recent lows. Supply side narratives are hard to change at this point in the growing season, even if thousands of pictures of immature corn and soybeans plants are making the rounds on social media.

Extended weather forecasts into September showing frost potential will become popular the next 10 days. An early end to the growing season remains the best hope for this market to cut additional supply and stage an extended recovery.

OUTSIDE MARKETS: Previous closes Monday showed the Dow Jones Industrial Average up 249.78 at 26,135.79 and the S&P 500 up 34.97 at 2,888.68 while the 10-Year Treasury yield ended at 1.598%. Early Tuesday, the September DJIA futures are down 1 point.

Asian markets are mixed with Japan’s Nikkei 225 up 114.06 (0.55%) and China’s Shanghai Composite down 3.09 points (-0.11%). European markets are mixed with London’s FTSE 100 up 13.45 points (0.19%), Germany’s DAX down 17.05 points (-0.19%) and France’s CAC 40 down 2.16 points (-0.04%).

The September Euro is down 0.001 at 1.110 and the September U.S. dollar index is up 0.039 at 98.260. The September 30-Year T-Bond is up 1/2, while December gold is up $1.10 at $1,512.70 and September crude oil is up $0.13 at $56.34. Soybeans on China’s Dalian Exchange were up 0.15% while soybean meal was up 0.21%.

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