DTN Closing Grain Comments

General Comments:

July corn closed down 9 1/4 cents per bushel and December corn was down 8 1/2 cents. July soybeans closed down 11 1/4 cents and November soybeans were down 10 3/4 cents. July KC wheat closed down 6 cents, July Chicago wheat was down 11 1/2 cents and July Minneapolis wheat was down 11 1/2 cents. The June U.S. dollar index is trading down 0.418 at 97.635. The Dow Jones Industrial Average is down 275.81 points at 24,894.07. June gold is up $18.40 at $1,305.50, July silver is up $0.08 at $14.58 and July copper is down $0.0150 at $2.6390. July crude oil is down $2.43 at $54.16, July heating oil is down $0.0683, July RBOB is down $0.0717 and July natural gas is down $0.090.

For the week:

July corn closed up 22 3/4 cents and December 2019 corn was up 23 1/2 cents. July soybeans were up 48 cents while November 2019 soybeans were up 48 1/2 cents. July Kansas City wheat was up 31 cents, July Chicago wheat was up 13 1/2 cents, and July Minneapolis wheat was up 4 cents.

Corn:

July corn spent the day trading lower and finished down 9 1/4 cents at $4.27 Friday, securing a 22 3/4 cent gain on the week. Friday's trade showed some bearish impact from President Donald Trump's tweet that he was raising tariffs on Mexican goods. Mexico is an important U.S. ag customer, accounting for 26% of U.S. corn exports in 2017-18 and 30% of corn exports so far this season. A somewhat drier forecast the next five days will allow some planting to take place before rain returns to the eastern and southwestern Midwest late next week. The extended forecast should allow for more planting progress in the northern Corn Belt, but the eastern Midwest and southern Corn Belt remain areas of concern with above-normal precipitation expected. Estimating U.S. corn ending stocks for 2019-20 is difficult under these tenuous conditions and I offer two possible scenarios in Friday's DTN column Todd's Take to help understand what prices might be capable of doing (see "Estimating Ending Corn Stocks, Prices"). Early Friday, USDA said last week's export sales and shipments of corn totaled 35.7 million and 67.7 million bushels (mb), respectively, a bullish enough combination to keep U.S. corn exports above their estimated pace. With the national average of cash corn prices above $4.00, there is better incentive to get corn planted. The unanswered question continues to be how many acres won't get planted? Fundamentally, the outlook for corn prices is neutral to bullish and highly uncertain. Technically, the trend is up as cash corn prices are sitting near their highest levels in four years. DTN's National Corn Index closed at $4.09 Thursday, 27 cents below the July contract. In outside markets, Dow Jones Industrials are down 276 points and June gold was up $18.40 after President Trump's tweet about raising tariffs on Mexico.

Soybeans:

July soybeans also traded lower most of the day, closing down 11 1/4 cents at $8.77 3/4 Friday. For the week, the July contract gained 48 cents. USDA's news on Tuesday that only 29% of soybeans were planted spurred this week's rally in soybeans as planting concerns widened and caught noncommercials heavily short and vulnerable. It is still difficult to envision much bullish potential for soybeans as there is time for planting in June and USDA's U.S. ending stocks estimate of 995 mb is not going away. Actually, the ending stocks estimate may increase as soybean shipments are below their estimated pace for the current season. USDA said Friday that last week's export sales and shipments of soybeans totaled 16.7 mb and 17.2 mb, respectively, roughly half of what is needed each week to meet USDA's export estimate of 1.775 billion bushels by the end of August. It also does not help U.S. soybean prices to not have trade deals with important ag customers. In 2017-18, Mexico bought 7% of U.S. soybean exports and has accounted for 11% of soybean exports in the current season. Fundamentally, the outlook for soybean prices leans bearish as long as China holds a 25% tariff over U.S. soybeans. Technically, this week's rally has turned the trend in cash soybeans to sideways. DTN's National Soybean Index closed at $8.07 Thursday, $0.82 below the July futures contract.

Wheat:

July KC wheat traded both sides of Thursday's close and finished down 6 cents Friday at $4.73, down from its highest close in over three months while heavy rain is expected in the seven-day forecast for Kansas and Oklahoma. The region has already seen its share of flooding and these new forecast amounts are likely to drag crop conditions down further. Unwelcome moderate amounts are also expected for SRW wheat crops in the eastern Midwest. To the north, the western Canadian Prairies are dry with little rain in the seven-day forecast. Canadian wildfires are creating smoke issues in the northwestern U.S. These North American problems may not have much impact on world wheat prices, but they have given U.S. wheat prices a lift the past several weeks. Fundamentally, higher world wheat production is still a reasonable expectation in 2019, but some weather problems are worth watching. Technically, the trends are up for all three U.S. wheats even though the fundamentals continue to lean bearish. DTN's National HRW Index closed at $4.61 Thursday, down 18 cents from the July futures contract. DTN's National SRW Index closed at $4.92 Thursday, up from its lowest prices in over a year and above its 100-day average.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

Copyright 2019 DTN/The Progressive Farmer. All rights reserved.