DTN Closing Grain Comments

General Comments:

December corn closed up 1 cent per bushel and December corn was up 1 cent. November soybeans closed down 14 1/4 cents and November soybeans were down 14 1/4 cents. September Kansas City wheat closed up 1 1/2 cents, September Chicago wheat was up 1 cent and September Minneapolis wheat was down 5 cents.

The September U.S. dollar index is trading up 0.584 at 96.915. The Dow Jones Industrial Average is down 60.63 points at 26,905.37. August gold is down $20.60 at $1,400.30, September silver is down $0.33 at $15.01 and September copper is down $0.0205 at $2.6625. August crude oil is up $0.08 at $57.42, August heating oil is up $0.0049, August RBOB is up $0.0088 and August natural gas is up $0.141.

For the week:

September corn closed up 14 cents and December 2019 corn was up 11 3/4 cents. August soybeans were down 28 1/2 cents and November 2019 soybeans were down 28 1/2 cents. September KC wheat was down 16 1/4 cents, September Chicago wheat was down 12 1/4 cents, and September Minneapolis wheat was down 21 cents.

Corn:

Corn struggled throughout Friday to follow through on Wednesday's sizable rally, but was able to eke out a small gain at the end. As the trade still grapples with the ultimate extent of both corn acreage and yield losses, the focus has turned to weather in the weeks ahead, and the mostly warmer forecast is considered beneficial. The mix of rain and sun into July 20 should help corn potential and maturity. Funds were estimated to have bought 20,000 corn contracts on Wednesday, putting funds long just over 100,000 contracts. U.S. export sales and shipments continue to struggle with export sales just 6.9 million bushels (mb) the week ended June 27. Total export commitments are now down 15% versus a year ago, and there is the likelihood that USDA may be forced to lower exports in the July report. Cheaper corn offers from both South America and the Black Sea have cut into U.S. corn demand, as has feed wheat. While exports continue to be a struggle, the interior basis, especially in the Eastern Corn Belt has been on fire as end users scramble and farmers have little interest in selling here. Some areas in Indiana and Ohio are paying as much as 65 over September futures for cash corn. Look for the $4.20 area on December corn to once again be support on a break, while the $4.48 to $4.50 area should provide plenty of resistance on the upside. DTN National Corn Index closed at $4.22 on Wednesday, priced 22 cents below the September futures.

Soybeans:

Soybeans have given back all of the gains from Wednesday plus some. With Wednesday's rumors of Chinese interest in U.S. soybeans not confirmed, China's reiteration of the demand to remove all tariffs, and beneficial weather for the next two weeks, beans had a bearish tone on Friday. Soybean sales, though decent at 31.9 mb for last week, bring total commitments to down 15% from a year ago with shipments lagging even more. Soybean shipments are running 24% behind a year ago. The good news is that China was the primary buyer last week, at 607,000 mt (22.3 mb). U.S. exporters are making an effort to lure non-Chinese buyers. The U.S. has just 2.5 million metric ton (mmt) of new-crop soybean sales on the books compared to 8 mmt last year. Also weighing on values on Friday as well is news that yet another case of African swine fever (ASF)-- the 143rd since last August -- showed up in southern China on Thursday. The jury is still out on the extent of the demand loss from ASF, with some projecting that final Chinese soy imports could fall to 82 mmt to 83 mmt. The National Oceanic and Atmospheric Administration (NOAA) came out with their 30-day weather forecast and after heat in the near term, it is cooler and wetter, which should benefit the crop. Funds are thought to be still net-short close to 70,000 contracts of soybeans. Look for a break below $8.85 on November soybeans to lead to another leg lower, as U.S. and world soy supplies are burdensome. DTN's National Soybean Index closed at $8.15 on Wednesday, priced 75 cents below the August contract.

Wheat:

In quiet post-holiday trade, wheat closed a bit higher, following through from Wednesday's rally. Under pressure early in the day as the U.S. dollar index shot up as the result of the better-than-expected jobs report, hard wheat markets recovered to finish higher. Minneapolis wheat weakened on widespread rains moving across the spring wheat belt. U.S. wheat export sales for the week ended June 27 were just so-so at 10.2 mb, but total commitments of 265 mb compares to a year ago at just 220 mb -- up 21%. However, relative to the EU and Black Sea exporters, U.S. HRW is said to be $9 to $15 per metric ton (mt) more expensive, while U.S. soft wheat is $25 to $35/mt higher than major competitors. Tunisia on Thursday bought 67,000 mt of French wheat and Algeria's 660,000 mt purchase of optional origin milling wheat will likely also originate in France. EU soft wheat is pegged at 141.7 mmt, and that is 13 mmt higher than a year ago. Germany also looks to have a larger crop, with the most recent production called 24.1 mmt -- well above last year's 19.6 mmt. U.S. HRW production looks to be on the rise, with the USDA's 794 mb projection being dwarfed by private analyst estimates of 825 to 850 mb. Early returns from the HRW harvest suggest very large if not record yields in some areas, but roughly a 1% lower protein, likely to pressure feed grain markets. HRW and SRW harvests should see plenty of activity in the coming days. On a further rally expect the $4.55 to $4.60 area on KC September wheat to be heavy resistance on a bounce. DTN's National HRW index closed at $4.22 on Wednesday, 22 cents under the September contract.

Dana Mantini can be reached at dana.mantini@dtn.com

Follow Dana on Twitter @mantini_r

(CZ)

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