DTN Closing Grain Comments

Wheat, Soybeans Earn Small Gains With Reports Ahead

Dana Mantini
By  Dana Mantini , Senior Market Analyst
(DTN illustration by Nick Scalise)

General Comments:

July corn closed steady and December corn was up 3/4 cent. July soybeans closed up 2 1/4 cents and November soybeans were up 2 3/4 cents. July KC wheat closed up 4 cents, July Chicago wheat was up 3 cents and July Minneapolis wheat was steady. The June U.S. dollar index is trading up 0.205 at 96.695. The Dow Jones Industrial Average is up 82.79 points at 26,066.73. August gold is down $13.50 at $1,332.60, July silver is down $0.35 at $14.68 and July copper is up $0.0335 at $2.6610. July crude oil is down $0.88 at $53.11, July heating oil is down $0.0232, July RBOB is down $0.0154 and July natural gas is up $0.010.

Corn:

After hearing news over the weekend that the U.S. would not enforce a new tariff on Mexican goods, July corn traded lower Sunday evening and finished unchanged at $4.15 3/4 Monday. The central and Western Corn Belt saw many take advantage of improved planting opportunities last week and it will be interesting to see USDA's reported progress at 3 p.m. CDT. Monday's seven-day forecast looks moderately wet from Iowa on east with heavy amounts squelching planting chances in Ontario and threatening a return of flooding around Oklahoma and Missouri. Monday afternoon's Crop Progress report will also have the first assessment of corn crop conditions for the new season, but I'll be paying more attention to the percent of the crop that has emerged. Broad coverage of warmer temperatures will help corn this week. USDA's next WASDE estimates will be released Tuesday at 11 a.m. CDT. While analysts in Dow Jones' survey expect corn production and yield to be lower in 2019, it is difficult to say how much USDA will be willing to reduce its May estimates without a good way to make measurements this early in the season. On the demand side, USDA said 33.5 million bushels (mb) of corn were inspected for export last week, less than the 47.8 mb needed each week to reach USDA's export goal by the end of August. Fundamentally, the outlook for corn prices remains neutral to bullish, depending on how many acres have been lost in 2019. Technically, the trend of cash corn prices remains up and appears to be finding resistance near $4.54, its four-year high. DTN's National Corn Index closed at $3.90 Friday, 25 cents below the July contract and near its highest prices in four years. In outside markets, Dow Jones Industrials are up 83 points and cattle and hogs were higher, helped by news of no new tariffs on Mexico.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Soybeans:

July soybeans started lower Sunday evening, but turned higher Monday morning and ended the session up 2 1/4 cents at $8.58 1/2. Fundamentally, it is difficult to find a solid argument for higher soybean prices other than this year's challenging planting conditions have made noncommercial shorts nervous. As mentioned above for corn, soybean planting will remain difficult this week in the eastern Midwest and in Ontario. Dow Jones' survey expects USDA to increase its estimate of new-crop ending soybean stocks from 970 mb to 987 mb, based on 4.092 bb of production and a slightly lower yield of 48.7 bushels per acre. There is room, however, for a larger increase in ending stocks as soybean exports have not been keeping pace with USDA's export estimate. Earlier Monday, USDA said 26.3 mb of soybeans were inspected for export last week, below the 36.0 mb needed each week to stay on pace; 14.8 mb of the inspections were marked for mainland China. Fundamentally speaking, this season's ending soybean stocks will likely finish comfortably above 1 billion bushels and remain a bearish threat to prices. Technically, soybean prices are currently chopping sideways, staying below the 100-day average at $9.00. DTN's National Soybean Index closed at $7.76 Friday, 80 cents below the July contract and falling back from resistance near $8.00.

Wheat:

July KC wheat ended up 4 cents at $4.53 Monday, turning a modestly lower start into a modestly higher finish with some help from concerns of untimely rain. The southwestern U.S. Plains have been hit with heavy rains lately as wheat is getting closer to harvest and the back end of the seven-day forecast is expecting more heavy amounts around Kansas, Oklahoma, Missouri and Arkansas. July Minneapolis wheat traded quietly and ended down 1/4 cent after USDA's Animal and Plant Health Inspection Service confirmed the presence of genetically engineered wheat plants in an unplanted field in the state of Washington. A similar discovery in Oregon in 2013 led to a temporary refusal of U.S. soft white wheat shipments until an investigation assured U.S. customers and that kind of situation could happen again. Elsewhere for spring wheat, the western Canadian Prairie received some helpful rain amounts over the weekend, but Saskatchewan remains in need of moisture. Russia's spring wheat region received helpful showers recently after a drier start. Earlier Monday, USDA provided the first week of export inspections for 2019-20, totaling 17.1 mb as of June 6, close to the weekly amount needed to reach the new export estimate of 900 mb. Tuesday's WASDE report is expected to keep U.S. wheat production near the May estimate of 1.897 billion bushels, but a surprise is possible as field surveys are included. Fundamentally, USDA is likely to repeat its expectation for record high world wheat production in 2019, a bearish weight on prices. Technically, the trend is currently up for cash SRW and HRS wheats and sideways for HRW wheat. DTN's National HRW Index closed at $4.31 Friday, down from its recent three-month high and 18 cents below the July contract. DTN's National SRW Index closed at $4.86, also down from its highest prices in three months.

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

Follow him on Twitter @ToddHultman1

(CZ)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Dana Mantini