DTN Closing Grain Comments

General Comments:

July corn closed down 4 1/4 cents per bushel and December corn was down 3 cents. July soybeans closed down 9 1/4 cents and November soybeans were down 8 1/4 cents. September KC wheat closed up 3 3/4 cents, September Chicago wheat was up 6 1/2 cents and September Minneapolis wheat was up 2 1/2 cents.

The September U.S. dollar index is trading up 0.037 at 95.685. The Dow Jones Industrial Average is up 55.39 points at 26,603.61. August gold is down $4.50 at $1,414.20, July silver is down $0.03 at $15.28 and July copper is down $0.0180 at $2.7175. August crude oil is up $1.60 at $59.43, August heating oil is up $0.0482, August RBOB is up $0.0908 and August natural gas is down $0.013.

Corn:

December corn ended down 3 cents at $4.54 1/2 Wednesday, marking time ahead of Friday's widely anticipated Acreage report from USDA. The Dow Jones survey expects USDA to estimate 87.0 million acres (ma) of planted corn, a 5.8 million acre reduction from March's planting intentions. The catch, however, is because spring planting weather has been so extremely wet in 2019, there has been no other good year to compare to or good way of guessing how many acres were planted. Friday's report will need updating in August, but will give us the best planting estimate to date, and is likely to move corn prices, depending on what USDA says. Meanwhile, Wednesday's weather map is drier with scattered showers in the Western Corn Belt. Higher temperatures forecast for the week ahead, a change that will be helpful for crop conditions. Earlier Wednesday, the U.S. Energy Department said last week's ethanol production slipped to 1.072 million barrels per day, still a high level. Ethanol inventory remained at 21.6 million barrels, while spot ethanol prices are trading at their highest level in over a year. Fundamentally, the outlook for corn prices remains neutral to bullish, but Friday's reports could narrow the possibilities. Technically, the trend in corn remains up with cash prices among its highest in five years. DTN's National Corn Index closed at $4.31 Tuesday, 17 cents below the July contract. In outside markets, August crude oil is up $1.60, supported by a 12.8 million barrel drop in last week's inventory and ongoing tensions with Iran.

Soybeans:

November soybeans ended down 8 1/4 cents at $9.18 1/4 Wednesday, slowly drifting lower while traders wait for Friday's report from USDA. Even though planting has been extremely difficult in 2019, and there is a chance for a bullish surprise in Friday's Acreage report, June 1 soybean stocks will not be a bullish number. Overall, it continues to be difficult to build a bullish case for U.S. soybean prices as we anticipate over 1 billion bushels of ending soybean stocks in 2018-19 at the same time the U.S. and China remain stonewalled on trade. Early Wednesday, USDA said 5.33 mb (145,000 mt) of U.S. soybeans were sold to unknown destinations for 2018-19. Every sale helps, but much more will be needed to prevent soybean stocks from rising even more in 2019-20. The seven-day forecast for drier and warmer weather across the Midwest is helpful for crop conditions, and for the eastern Midwest, it will be the first break from persistent rain in months. U.S. and Chinese leaders are expected to discuss trade again at this week's G-20 meeting in Japan, but there is no sign yet that either side has changed its position. Fundamentally speaking, the outlook for soybean prices remains bearish as long as China holds a tariff on the import of U.S. soybeans. Friday's reports are not likely to change that. Technically, the trend is up in cash soybeans, but prices are falling back from a one-year high at $8.41. DTN's National Soybean Index closed at $8.29 Tuesday, down from its highest price in a year and 75 cents below the July contract.

Wheat:

September KC wheat closed up 3 3/4 cents at $4.82, holding in its sideways pattern. Wheat prices got a little help from Statistics Canada earlier Friday as they estimated wheat plantings at 24.6 ma, less than expected and down 0.6% from a year ago. The spring wheat portion of that total came out to 18.8 ma, up 8% from a year ago. Here in the U.S., this week's warmer and drier weather is looking better for winter wheat harvest. As we found out Monday, temperatures are hot in Europe this week and stressing crops. Overall, however, world wheat production is generally unthreatened and December milling wheat in Paris finished unchanged Wednesday. Fundamentally, the outlook for wheat prices remains bearish with record world production expected in 2019. Technically, the trend is currently up for cash SRW wheat and sideways for HRW and HRS wheats. Spot Chicago wheat is now 13% above the spot KC price, near its highest premium on record. DTN's National HRW index closed at $4.48 Tuesday, down from its recent three-month high and 17 cents below the July contract. DTN's National SRW index closed at $5.22, near its highest price in 10 months.

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

Follow him on Twitter @ToddHultman1

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