DTN Closing Grain Comments

General Comments:

September corn closed up 3/4 cent per bushel and December corn was up 1 1/2 cents. August soybeans closed up 3 cents and November soybeans were up 3 1/4 cents. September KC wheat closed down 4 1/2 cents, September Chicago wheat was down 4 cents and September Minneapolis wheat was down 3/4 cent. The September U.S. dollar index is trading up 0.050 at 96.940. The Dow Jones Industrial Average is down 139.81 points at 26,782.31. August gold is down $1.60 at $1,398.50, September silver is up $0.06 at $15.06 and September copper is down $0.0035 at $2.6575. August crude oil is up $0.43 at $57.94, August heating oil is down $0.0031, August RBOB is down $0.0228 and August natural gas is down $0.030.

Corn:

December corn closed up 1 1/2 cents at $4.43 3/4 Monday, a fourth consecutive day higher as traders continue to show confusion over how much U.S. corn will be produced in 2019. Except for heavy rain in North Dakota and moderate amounts stretching down to Nebraska, the seven-day forecast is drier for the rest of the Corn Belt, a reprieve from wet conditions for the Eastern Corn Belt. The next concern may be about the impact of hotter summer temperatures on late-planted crops, but for now, the increase of growing degree days is largely welcome. Earlier Monday, USDA said 27.7 million bushels (mb) of corn were inspected for export last week, a bearish amount that may contribute to a lower corn export estimate on Thursday. There is no doubt higher U.S corn prices are sending export business to Brazil, but the main concern for prices this summer continues to be the size of this U.S. crop. Prices are likely to stay relatively high and volatile at least until Aug. 12, when further information on planting is obtained from a second NASS survey. Monday afternoon's Crop Progress report is likely to show small improvement in crop conditions for both corn and soybeans. Technically, the trend in cash corn has turned sideways after hitting the highest prices in five years. DTN's National Corn Index closed at $4.24 Friday, 14 cents below the September contract and within a dime of this year's high. In outside markets, the September U.S. dollar index is up 0.05, two days before Federal Reserve Chairman Powell offers testimony to Congress.

Soybeans:

November soybeans closed up 3 1/4 cents at $8.97 3/4 Monday, staying below the $9.00 mark a second day as prices struggle to find support, even with USDA's lower-than-expected planting estimate of 80.0 million acres. As with corn, there are lots of questions about NASS's June planting estimates that many are hoping will be answered by a second survey released Aug. 12. Thursday's estimate of U.S. ending soybean stocks may come in lower than June's estimate because of the lower planting estimate, but it won't necessarily change the uncertainty around the situation. Earlier Monday, USDA said 27.8 mb of soybeans were inspected for export last week, less than the 34.0 mb needed each week to stay on pace with USDA's export estimate. I apologize for mentioning the issue of lack of trade with China for the umpteenth time again, but it is the prevailing bearish force for soybean prices and we just crossed the one-year anniversary of China's tariff on U.S. soybeans. Until the issue is resolved, the fundamental outlook for soybean prices is bearish, possibly eased by a smaller soybean crop in 2019. Technically speaking, the trend is back to sideways in cash soybeans as prices stay below their one-year high at $8.41. DTN's National Soybean Index closed at $8.02 Friday, 74 cents below the August contract.

Wheat:

September KC wheat closed down 4 1/2 cents at $4.40 3/4 with another week of good winter wheat harvest progress expected in Monday afternoon's Crop Progress report. For the most part, anecdotal harvest reports from Kansas sound good in terms of yield and quality. USDA will have updated production estimates in Thursday's Crop Production report and higher totals of HRW and HRS wheat are expected to offset lower SRW wheat production, resulting in roughly 20 mb more U.S. wheat production in 2019. That is not a big difference and there may be room for USDA to increase its wheat export estimate of 900 mb later in the season. Early Monday, USDA said 22.4 mb of wheat were inspected for export last week, putting total inspections up 48% from a year ago early in 2019-20. The main bearish concern for wheat prices however, is that world crops are largely doing well so far. Some areas like Europe could use more rain, but current concerns are limited. Technically, the trend is sideways for cash SRW wheat and down for HRW and HRS wheats. DTN's National HRW Index closed at $4.24 Friday, 21 cents below the September contract. DTN's National SRW Index closed at $4.97, down from its highest prices in four years.

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

Follow him on Twitter @ToddHultman1

(CZ)

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