DTN Closing Grain Comments

General Comments:

September corn closed down 13 1/4 cents per bushel and December corn was down 12 1/4 cents. August soybeans closed down 11 1/2 cents and November soybeans were down 11 1/2 cents. September KC wheat closed down 18 1/4 cents, September Chicago wheat was down 15 1/4 cents and September Minneapolis wheat was down 10 1/4 cents. The September U.S. dollar index is trading up 0.131 at 96.555. The Dow Jones Industrial Average is down 12.14 points at 27,319.89. August gold is up $2.00 at $1,414.20, September silver is up $0.14 at $15.38 and September copper is up $0.0205 at $2.7145. August crude oil is down $0.64 at $59.57, August heating oil is down $0.0272, August RBOB is down $0.0439 and August natural gas is down $0.055.

Corn:

December corn closed down 12 1/4 cents at $4.47 Monday, taking back part of Friday's gain after more rain showed up in Monday's forecast. Friday's outlook of mostly hot and dry weather for the Corn Belt now has heavy rain expected from Minnesota to the Great Lakes and moderate to heavy amounts in the eastern Midwest coming from Tropical Storm Barry. Heavy rains are falling along the lower Mississippi River, adding to transportation problems. The southwestern Corn Belt, including southern Iowa and northwestern Missouri, will be hot and mostly dry the next seven days. Earlier Monday, USDA said 26.6 million bushels (mb) of corn were inspected for export, less than the 37.8 mb needed each week to reach USDA's export estimate by the end of August. The big challenge for this market continues to be estimating 2019 production without a good planting estimate -- something we hope to have from USDA by Aug. 12. Until then, the fundamental outlook for corn prices remains neutral to possibly bullish with plenty of uncertainty about the crop ahead. Friday's CFTC data showed noncommercials holding 303,206 contracts net long. Technically, the trend in cash corn is up. DTN's National Corn Index closed at $4.45 Friday, 9 cents below the September contract and a new five-year high. In outside markets, the September U.S. dollar index is trading up 0.13 and other commodities are mixed, mostly lower.

Soybeans:

November soybeans dropped 11 1/2 cents to $9.20 Monday, pressured by more rain in the seven-day forecast. Even so, soybean crops are off to a rough start in 2019 with the lowest good-to-excellent crop ratings in seven years. USDA will update the ratings Monday afternoon and it is not likely to be much better, if at all. Conditions will be fairly dry and hot this week around Nebraska and Iowa where crops benefited from better planting conditions earlier this summer; it was wetter elsewhere. On the demand side, hope springs eternal that China will buy more U.S. soybeans (or so it seems), but the evidence isn't there yet. Earlier Monday, USDA said 31.4 mb of soybeans were inspected for export last week, a little below the 34.7 mb needed each week to reach USDA's export estimate of 1.700 billion bushels (bb). The export estimate is already down 20% from a year ago and may have to come down a little more, depending on whether or not China ships all the soybeans it has purchased so far. Also on Monday, the National Oilseed Processors Association said 148.8 mb of soybeans were crushed in June, less than expected and down 7% from a year ago. With over 1 billion bushels of surplus U.S. soybeans in the current season, the fundamental outlook for soybean prices remains bearish, but could be moderated by a smaller crop in 2019. Technically speaking, the trend is sideways in cash soybeans with support around $7.85. DTN's National Soybean Index closed at $8.43 Friday, a new one-year high and 70 cents below the August contract.

Wheat:

September KC wheat fell back 18 1/4 cents to $4.49, taking a cue from corn and also from a drop of nearly 1% in Europe's wheat price on Monday. Monday afternoon's Crop Progress report will show more harvest progress for winter wheat. Harvest progress is doing well in the western Plains and may run into some disruption this week with rain in the eastern Midwest from Tropical Storm Barry. U.S. spring wheat conditions are likely to remain favorable Monday afternoon with light to moderate rain expected in the northwestern U.S. Plains this week. Light to moderate showers will help wheat in the western Canadian Prairies, but parts of southern Saskatchewan could use more rain, as could wheat crops in Europe and Russia. Overall however, a new record high in world wheat production is still expected by USDA in 2019, an ongoing bearish influence on wheat prices. Technically, the trend is currently sideways for all three cash wheats. DTN's National HRW Index closed at $4.45 Friday, 22 cents below the September contract. DTN's National SRW Index closed at $5.04, 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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