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DTN Early Word Grains         09/24 05:54

   Harvest Pressure Emerges Early Thursday

   December corn is down 5 1/4 cents, November soybeans are down 12 1/4 cents 
and December KC wheat is down 5 1/4 cents. 

Todd Hultman
DTN Lead Analyst

   Pre-6 a.m. Globex Prices:  December corn is down 5 1/4 cents, November 
soybeans are down 12 1/4 cents and December KC wheat is down 5 1/4 cents.

   CME Globex Recap: Early Thursday, Dow Jones futures are slightly higher, but 
under pressure from lower trading in European and Asian stock markets and 
ongoing concerns about the economic limitations of coronavirus. The December 
U.S. Dollar Index is a little higher and most commodities, including grains, 
are starting lower. Crude oil is lower with concerns about slower oil demand, 
even after the Energy Department reported a 2.4 million barrel drop in last 
week's inventory. Row crop harvest is picking up across the Midwest and 
presenting a new source of selling pressure in corn and soybeans.

   OUTSIDE MARKETS: Previous closes on Wednesday showed the Dow Jones 
Industrial Average down 525.05 at 26,763.13 and the S&P 500 down 78.65 at 
3,236.92 while the 10-Year Treasury yield ended at 0.68%. Early Thursday, 
December Dow Jones futures are up 35 points. Asian markets are lower with 
Japan's Nikkei 225 down 258.67 (-1.1%) and China's Shanghai Composite down 
56.53 points (-1.7%). European markets are lower with London's FTSE 100 down 
44.05 points (-0.7%), Germany's DAX down 68.39 points (-0.5%) and France's CAC 
40 down 34.51 points (-0.7%). The December euro is down $.0003 at $1.1675. The 
December U.S. Dollar Index is up .03 at 94.48. The December 30-year T-bond is 
up 7/32, while December gold is down $12.90 at $1,855.50 and November crude oil 
is down $0.30 at $39.63. On China's Dalian Exchange, soybeans are slightly 
higher, while corn and soybean meal are trading a little lower early Thursday. 
November palm oil is trading down 2.8%, a fourth day lower from its recent 
eight-month high.

   BULL                                       BEAR
   The hot streak of export sales
   continued Wednesday with 9.5 million       Noncommercials in soybean oil are
   bushels (mb) of soybeans sold to a mix     vulnerable to further liquidation
1) of China and unknown. It was the 14th   1) after this week's sharp losses in
   consecutive soybean sale announced by      both soybean oil and palm oil.
   USDA.

   Noncommercial buying took December         Even with a bullish pace of corn
   soybean meal to a new 2-year high          and soybean export sales, it is
   Wednesday and is helping the crush         difficult for prices to ignore
2) margin remain somewhat attractive,      2) large corn and soybean harvests
   despite this week's lower soybean oil      on the way.
   prices.

   December corn had been holding near its    Increased rain chances the next
   highest price in six months, but           five days for Argentina and
3) appears to be giving way to harvest     3) Ukraine are bearish for wheat
   pressure early Thursday.                   prices.



MORE COMMODITY-SPECIFIC COMMENTS

   CORN  December corn is down 5 1/4 cents early Thursday, giving way to 
harvest pressure as combine activity picks up across the Midwest. Thursday 
morning's weather maps shows rain in Minnesota and Wisconsin, but the rest of 
the Corn Belt is dry and is expected to stay that way for at least another two 
weeks. Temperatures are expected to remain above normal the next five days, but 
then turn below normal in the transition to October. As of Friday, December 
corn prices had rallied 58 1/2 cents from its August low to a new six-month 
high, thanks largely to dry weather and an active pace of higher-than-expected 
export sales. The August low of $3.20 will likely stand as the low of the 
season, but that doesn't mean prices will be able to ignore the 14.9 billion 
bushels (bb) of new corn supplies now coming to market. Wednesday's report from 
the Energy Department showed a small decline in last week's ethanol production 
and getting back to last year's production level remains out of reach. Thursday 
morning's export sales report is apt to show at least 833 million bushels (mb) 
of corn export commitments in 2020-21, a strong early start that is helping 
keep ending corn stocks below the 3.0 bb discussed earlier this year. 
Fundamentally, USDA's ending corn stocks estimate of 2.50 bb points to cash 
corn prices in the low $3s, but we still have a lot to learn about export sales 
in the rest of 2020-21. Technically, the trend in cash corn is up, but prices 
encountered recent resistance and a new trading range looks likely for the rest 
of 2020. DTN's National Corn Index finished at $3.41 Wednesday evening, down 
from its six-month high and 28 cents below the December contract.

   SOYBEANS  November soybeans are down 12 1/4 cents early Thursday, starting 
what looks like a fourth consecutive day of lower prices. Friday's high of 
$10.46 3/4 represented a rally from the August low of over $1.80 a bushel and 
was the highest November soybean price posted since before the trade dispute 
with China began. Tops are difficult to call and the hot streak of soybean 
export sales has not stopped yet; Wednesday's 9.5 mb sale to China and unknown 
was the 14th consecutive soybean sale announcement from USDA and there may be 
another later Thursday. However, it is not surprising to see the new two-year 
high in soybeans attract selling, especially now with soybean harvest starting 
to pick up across much of the Midwest and trucks lining up at local elevators. 
As far as weather is concerned, the next two weeks look favorably dry for crop 
maturity and harvest progress, much better conditions than a year ago. Beyond 
harvest, there is a risk of soybean stocks eventually tightening and much will 
depend on China's level of demand and the success of South America's next 
crops. U.S. soybean export commitments now total 1.32 bb and at least 1.27 bb 
should be seen in Thursday morning's weekly report. Fundamentally speaking, 
soybean prices still have bullish potential, but 4.31 bb of new soybean 
supplies are apt to exert some bearish pressure this fall. Technically, the 
trend for November soybeans remains up with the 2016 high of $10.60 1/2 
offering a target for likely resistance. DTN's National Soybean Index finished 
at $9.59 Wednesday, down from its two-year high and 55 cents below the November 
contract.

   WHEAT  December KC wheat is trading down 5 1/4 cents, extending this week's 
losses with bearish influence from lower trading in corn and a slightly higher 
U.S. dollar early Thursday. As we have often described in 2020, it is difficult 
for wheat prices to sustain much of a rally when USDA is estimating a record 
world wheat crop and a record level of world ending wheat stocks in 2020-21. 
The bearish combination has proven difficult for December KC wheat prices, but 
this market is still trading roughly 60 cents higher from its low in early 
August, thanks to higher row crop prices, modestly higher wheat export sales 
and early dry weather concerns as we look ahead to 2021. This week, news of 
beneficial rains in the forecasts for Argentina and Ukraine eased some of the 
bullish anticipation seen late last week, but it is still early and planting 
conditions are still dry in the Black Sea region and much of the western U.S. 
Here in the U.S., the forecast for winter wheat areas remains dry the next two 
weeks with drought expected to expand into the southern U.S. Plains the next 
several months. Fundamentally, global wheat supplies remain plentiful and are 
bearish on prices. Here in the U.S., winter wheat supplies are leaner than a 
year ago and prices have a chance to trade higher this winter. Technically, the 
trend in cash HRW wheat prices is up and ran into resistance near the 2020 high 
of $4.79 on DTN's National HRW Wheat Index. The index settled at $4.55 
Wednesday, 29 cents below the December contract. DTN's National SRW Wheat Index 
closed at $5.24, down from its highest price in five months.

              DTN Cash   Change From    National      Contract   Change from
Commodity     Index      Prev Day       Avg. Basis    Month      Prev Day
Corn:         $3.41      $0.00          -$0.28        Dec        $0.005
Soybeans:     $9.59      -$0.05         -$0.55        Nov        $0.004
SRW Wheat:    $5.24      -$0.08         -$0.25        Dec        $0.006
HRW Wheat:    $4.55      -$0.10         -$0.29        Dec        -$0.027
HRS Wheat:    $4.92      -$0.13         -$0.41        Dec        -$0.065

    

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

   Follow Todd on Twitter @ToddHultman1 




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