DTN Before The Bell Grain Comments

Morning CME Globex Update:

July K.C. wheat was down 4 cents early Tuesday with rain falling in western Kansas and more expected in the region Wednesday. July contracts of corn and soybeans were a little lower with better planting conditions on the way. At 8 a.m. CDT, USDA said 4.8 million bushels (130,000 mt) of U.S. soybeans were sold to Argentina, 2.2 million bushels (60,000 mt) of which were for 2017-18.

Other Markets:

Dow Jones:	Higher
U.S. Dollar Index:	Higher
Gold:	Higher
Crude Oil:	Higher

Corn:

July corn was down a penny early Tuesday with better planting weather expected ahead. Late Monday, USDA said corn was 5% planted, down from the five-year average of 14%. Plantings remain mostly in southern states, but that should start to improve now that warmer temperatures are coming to the Corn Belt. Traders are also keenly aware that a lot planting progress can happen in one good week. Tuesday's weather map has rain from Indiana to the mid-Atlantic states and some in the western Plains, but the seven-day forecast is mostly dry east of Ohio, favorable for planting as temperatures warm. In Brazil, the second corn crop has been in good shape until recently, but conditions have turned dry and the seven-day forecast is also mostly dry. Fundamentally, the outlook for corn prices remains neutral with the uncertainty of a new growing season ahead. Technically, the trend remains sideways in May corn and up in new-crop corn although prices have backed down from their April high. DTN's National Corn Index closed at $3.47 Monday, down from its highest prices since June 2016 and priced 31 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.03 with outside commodities mixed.

Soybeans:

At 8 a.m. CDT, USDA said 4.8 million bushels (130,000 mt) of U.S. soybeans were sold to Argentina, 2.2 million bushels (60,000 mt) of which were for 2017-18. July soybeans were down 1 1/2 cents early, continuing to drag lower while not much demand is being shown for U.S. soybeans. Before Tuesday's sale to Argentina, it was nearly two weeks since USDA announced a daily export sale for soybeans and shipments are down 13% from a year ago. Even though China will likely need to buy some U.S. soybeans in the fall, there is a good chance USDA's ending soybean stocks estimate will need to be increased for 2017-18, reflecting China's avoidance of U.S. soybeans in the current season. That is keeping old-crop soybean prices under bearish pressure and, at some point, may add pressure on noncommercial net longs to liquidate. Late Monday, USDA said 2% of soybeans were planted, mostly in southern states and on pace with their five-year average. Outside the U.S., the fundamental outlook for soybean prices is much more bullish with Argentina's drought forcing China to bid up Brazil's soybean prices. Here in the U.S., the fundamental outlook is neutral to bearish for old-crop soybean prices while China keeps its purchases minimal. Technically, the trend is sideways in old-crop soybeans with concerns of failing momentum. In new-crop soybeans, the trend is up, but currently stalled. DTN's National Soybean Index closed at $9.52 Monday, up from its March low and priced 69 cents below the May contract.

Wheat:

July Chicago wheat was down 4 1/2 cents and July K.C. wheat was down 4 cents at the morning break, pressured by rain in western Kansas and chances for light to moderate showers in the southwestern U.S. Plains on Tuesday and Wednesday. Late Monday, USDA said 13% of winter wheat was headed and 31% was rated good to excellent, the same as last week. DTN's Winter Wheat Condition Index inched up, from 47 to 48, the lowest score since 2011. In Kansas, 49% of the winter wheat crop was rated either poor or very poor. USDA also said 3% of spring wheat was planted, down from the five-year average of 25% as late winter storms prevented fieldwork in the northern Plains. Sep Minneapolis wheat was down a penny at the morning break, still pressured by the anticipation of warmer temperatures ahead which look more favorable for planting spring wheat. Fundamentally, the outlook for all wheat prices remains limited by plentiful global supplies with the wild card of a new season ahead. Technically, the trends remain sideways for all three wheats with prices trading at the lower end of their ranges. DTN's National SRW index closed at $4.32 Monday, near the middle of its range in April and 29 cents below the May contract.

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

FollowTodd on Twitter @ToddHultman1

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