DTN Closing Grain Comments

General Comments:

Corn was down 2 1/4 cents in the May contract and down 1 1/4 cents in the December. Soybeans were up 4 cents in the May contract and up 5 cents in the November. Wheat closed up 2 1/2 cents in the July Chicago contract, up 2 1/2 cents in the July Kansas City and up 5 cents in the July Minneapolis contract.

The June U.S. dollar index is up 0.09 at 89.23. June gold is down $1.30 at $1,349.40 while May silver is up 10 cents, and May copper is down $0.0095. The Dow is up 217 points at 24,790. May crude oil is up $0.05 at $66.27. May heating oil is down $0.0186 while May RBOB gasoline is down $0.0062 and May natural gas is down $0.013.

Corn:

May corn closed down 2 1/4 cents at $3.80 1/4 Tuesday, the fifth decline in six sessions as traders anticipate the possibility of corn being planted in 2018. Not much has happened yet as, late Monday, USDA said 3% of corn was in the ground. Most planting has taken place in Texas as soil temperatures in the bulk of the Corn Belt remain too cold, still under snow in the Northern Plains. This week's forecast includes more snow for northern Iowa on Wednesday and remains on the cold side for all, but the southern states. Meanwhile, central Brazil's second corn crop is doing well with moderate showers in this week's forecast. According to World-Grain.com, Japan's government has agreed to allow up to 95 million gallons of U.S. ethanol to become part of Japan's fuel mix, a small win for corn demand. Related to corn, AP news said China ruled on Tuesday that sorghum prices imported from the U.S. were unfairly low and ordered importers to deposit 179% of the value of their goods to cover the cost of possible anti-dumping duties. The news was another reminder of the ongoing feud between China and the U.S. over trade issues. Fundamentally, the outlook for corn prices remains neutral with plenty of uncertainty ahead in the new season. Technically, the trend in May corn remains sideways and the trend in new-crop corn is up. DTN's National Corn Index closed at $3.49 Monday, down from its highest prices since June 2016 and priced 34 cents below the May contract. In outside markets, the June U.S. dollar index is quiet, trading up 0.09 and other commodities are mixed after the U.S. Commerce Department said housing starts were up 7.5% in March from a year ago, which was more than expected.

Soybeans:

May soybeans ended up 4 cents at $10.46 on light volume Tuesday, staying within its sideways trend while traders continue to assess a wide range of market factors. Outside the U.S., China's demand for Brazil's soybeans remains strong and Brazil's FOB price is near its highest level since July 2016 in spite of this year's record soybean harvest. Here in the U.S., the extended forecast is giving corn a little hope for better planting conditions in May, but it is still too early to be confident about U.S. corn or soybean acres in 2018. Soil moisture is generally favorable in the Midwest and warmer temperatures should arrive eventually -- at least that's what we keep telling ourselves. The main hurdle for old-crop soybean prices lately has been the slow pace of demand so far in 2017-18 as exports are running 13% below last season. Trade tensions remain high with China, and it will be interesting to see how long they are able to keep avoiding buying U.S. soybeans. Fundamentally, the outlook for soybean prices is bullish outside of the U.S. and neutral within the U.S. Technically, the trend in old-crop soybeans is sideways while the trend in new-crop soybeans remains up, with signs of strong commercial buying interest in future spreads. DTN's National Soybean Index closed at $9.71 Monday, down from its highest prices in over a year and priced 71 cents below the May contract.

Wheat:

July Chicago wheat and July Kansas City wheat were both up 2 1/2 cents Tuesday, a session of low-volume trading after five consecutive lower sessions in K.C. Tuesday's seven-day forecast expects a broad coverage of light to moderate showers around the southwestern Plains later this week, which will be somewhat helpful in areas where winter wheat crops still have a chance. Until then, wildfire risk remains high in West Texas where windy conditions are taking temperatures into the 90s on Tuesday. Late Monday, USDA increased the good-to-excellent rating for winter wheat from 30% to 31%, but also increased the poor-to-very poor rating from 35% to 37%. Poor-to-very poor crop ratings for Kansas, Oklahoma and Texas were 46%, 65% and 63%, respectively. Farther north where snow still covers much of the Northern Plains, USDA said 3% of spring wheat was planted, mostly in Washington and Idaho. As we get closer to May, it is becoming more important that no significant problems are being reported for Europe, Ukraine, and southern Russia -- bearish news for wheat prices. For now, the trends remain sideways for all three wheats with winter wheat prices back toward the lower end of their trading ranges. DTN's National SRW index closed at $4.31 Monday, down from its highest prices in eight months and 31 cents below the May contract. DTN's HRW index closed at $4.77, down from its highest price in two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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