DTN Closing Grain Comments

Cooler Temperatures Send Grains Lower

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
Connect with Todd:
(DTN illustration by Nick Scalise)

General Comments:

September corn closed down 8 1/2 cents and December corn closed down 9 cents. August soybeans closed down 13 1/4 cents and November soybeans were down 13 1/2 cents. September KC wheat closed down 10 3/4 cents, September Chicago wheat was down 15 1/4 cents and September Minneapolis wheat was down 8 cents. The September U.S. dollar index is trading up .09 at 96.91. The Dow Jones Industrial Average is up 12.26 points at 27,166.46. August gold is up $2.10 at $1,428.80, September silver is up $0.23 at $16.43 and September copper is down $0.0310. August crude oil is up $0.56 at $56.19, August heating oil is up $0.0155, August RBOB gasoline is down $0.0071 and August natural gas is up $0.0580.

Corn:

December corn fell 9 cents to $4.26 3/4 Monday, trading at the lower end of a choppy, sideways range while traders wait three more weeks to find out how many of the 15.8 million unplanted corn acres in the June Acreage report actually got planted. Monday afternoon's Crop Progress report probably won't show much change in good-to-excellent ratings for corn after last week's mix of hot temperatures and scattered showers. The seven-day forecast looks drier, but with milder temperatures that should be mostly helpful for crops nearing pollination. While lots of questions remain on the production side of the ledger, export demand continues to disappoint. Early Monday, USDA said 17.2 million bushels (mb) of corn were inspected for export last week, less than half the amount needed to reach USDA's export estimate in six weeks. Fundamentally, the outlook for corn prices remains neutral with lots of unanswered questions about the size of the 2019 crop. Technically, the trend in cash corn is back to sideways and choppy. DTN's National Corn Index closed at $4.23 Friday, 8 cents below the September contract and down from its five-year high. In outside markets, the September U.S. dollar index is trading up 0.09 and other commodities are mixed to mostly higher. Tensions with Iran remain high, but so far, investors are not showing much concern.

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

Soybeans:

November soybeans closed down 13 1/2 cents at $9.05 3/4 Monday after Sunday saw scattered showers across parts of the Midwest and ushered in milder temperatures that are expected to last at least seven days. The forecast is also mostly dry, but not as threatening when temperatures are not as hot. USDA's Aug. 12 WASDE report should help clear up questions about planted acres and then the guessing game on yields will get more attention. So far, USDA's good-to-excellent crop ratings have been the lowest in seven years and probably will be again in Monday afternoon's Crop Progress report. On the demand side, U.S. soybean exports have struggled without China's full participation. As a result, USDA is still expecting over 1 billion bushels (bb) of U.S. ending soybean stocks in 2018-19. Early Monday, USDA said 20.6 mb of soybeans were inspected for export last week, less than the 35.2 mb needed each week to achieve USDA's export estimate by the end of August. There have been rumors of increased interest from China lately, but no evidence of purchases yet. Fundamentally, the outlook for soybean prices remains bearish with a smaller crop in 2019 expected to help ease the bearish situation somewhat. Technically speaking, the trend is sideways in cash soybeans with support around $7.85. DTN's National Soybean Index closed at $8.32 Friday, down from a new one-year high and 70 cents below the August contract.

Wheat:

September KC wheat ended down 10 3/4 cents at $4.29 1/4, influenced by Monday's lower grain trade across the board and generally favorable harvest conditions for winter wheat. Monday afternoon's Crop Progress report should show good harvest progress for winter wheat, slowly moving northward in the western Plains with a mostly dry forecast and moderate summer temperatures to help. Kansas will likely be close to finished and most anecdotal reports have described better-than-expected yields and crops. The eastern Midwest saw tougher conditions this year with too much rain on the SRW wheat crop, but that harvest is moving along also. The 2019 Wheat Quality Council's Spring Wheat Tour kicks off Tuesday and will be inspecting northern fields through Thursday (see DTN's 2019 Spring Wheat Tour Preview by DTN Basis Analyst Mary Kennedy in DTN Ag News). USDA's good-to-excellent rating for spring wheat was a high 76% last week and will probably be close to the same Monday afternoon, before the tour begins. One bullish note for U.S. wheat prices this year has been a start of higher-than-expected exports in early 2019-20. Monday morning, USDA said 15.9 mb of wheat were inspected for export last week, less than needed each week for USDA's export estimate, but still showing total inspections up 28% from a year ago. The more important feature for wheat prices however is that USDA and the International Grains Council are both expecting record world production in 2019. Technically, the trend is currently sideways for SRW and HRS wheat, down for HRW wheat. DTN's National HRW Index closed at $4.18 Friday, 22 cents below the September contract. DTN's National SRW Index closed at $4.83, down from its highest prices in four years.

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[]

Todd Hultman