DTN Grain Midday: Corn Futures Seeing Double-Digit Decline

Photo: Zach Larson, Pennsylvania State University

Corn is 12 to 14 cents lower, soybeans are 3 to 5 cents lower and wheat is 11 to 17 cents lower.

CORN:

Corn trade is 12 to 14 cents lower at midday Wednesday with broader selling pressure developing during the day session, and broad commodity weakness overall. The WASDE report raised yields .2 bushels per acre (bpa) to 176.5 bpa with carryout rising 92 million to 1.5 billion bushels (bb) as demand softened slightly, with world stocks edging higher and no early issues to lower South American estimates.

Ethanol margins will continue to struggle with natural gas values and soft driving demand while tight stocks will limit production slowdowns as natural gas fades a bit more to support margins. South America will continue with early full-season corn planting and little weather concerns there so far.

Corn basis should remain flat to weaker near term with ethanol and export demand needing to catch up further. The daily wire showed an export sale of 161,544 metric tons to unknown with weekly crop progress showing harvest at 41% versus 31% on average with 94% rated mature versus 86% on average with 60% good to excellent and 15% poor to very poor on remaining acres.

On the December contract, we have resistance at the 20-day at $5.31 with the September low at $4.97 as support.

SOYBEANS:

Soybeans are 3 to 5 cents lower at midday, pulling back from early dime higher action as trade looks to consolidate after sliding below $12.00 post report as yields rose more than expected and spillover weakness leaning on the market during the day session. Meal is $0.50 to $1.50 lower and oil is 0.30 cent to 0.40 cent higher.

On the report, yield was raised to 51.5 bpa from 50.6 bpa last month with carryout at 325 million versus 185 last month with world stock edging higher on expected record South American production.

Harvest will be slowed a bit by rains but remained well above average at 49% harvested versus 40% on average, with 91% dropping leaves versus 89% on average and 59% good to excellent and 14% poor to very poor, with export sales on the daily wire of 330,000 metric tons to China and 198,000 metric tons to unknown.

Basis levels have been flat to weaker in recent days with crush margins stable. South American planting will get more attention into the end of the month as well as action scales up with a mixed short-term forecast remaining in place with Brazil wetter than Argentina short term. On the November soybean chart, resistance is at the 20-day at $12.58 with support the recent low at $11.84 3/4.

WHEAT:

Wheat trade is 12 to 17 cents lower at midday with Minneapolis wheat leading so far, while oats are sharply lower from recent highs after solid action post report. The dollar remains above 94 points on the index to limit upside but is weaker Wednesday morning. KC is at a 4-cent premium to Chicago with flat action so far, with Minneapolis at a 222-cent premium in firm action.

Weather in the Plains has been a little wetter as planting pushes forward with little fresh news on Southern Hemisphere weather so far. The report put carryout at 580 million bushels versus 615 mb last month, with world stocks down by 6 million metric tons.

Weekly crop progress put planting at 60% complete same as average with 31% emerged versus 35% on average with export inspections soft at 435,173 metric tons. KC December on the chart has support at the 20-day at $7.26, which we are just below at midday, then resistance at the fresh high of $7.64 then the contract high at $7.69 from this summer.

MARKET SUMMARY:

The U.S. stock market is mixed with the Dow down 180 points. The U.S. Dollar Index is 0.30 lower. Interest rate products are mixed. Energies are mixed with crude up $0.50. Livestock trade is weaker. Precious metals are firmer with gold up $34.00.

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