DTN Closing Grain Comments

General Comments:

Corn was down 1/2 cent in the July contract and down 1 cent in the December. Soybeans were up 1/4 cent in the July contract and down 1 1/2 cents in the November. Wheat closed down 9 1/2 cents in the July Chicago contract, down 5 1/2 cents in the July Kansas City, and down 2 1/2 cents in the July Minneapolis contract.

The June U.S. dollar index is up 0.36 at 91.31. June gold is down $4.30 at $1,318.50 while May silver is down 2 cents and May copper is down $0.0145. The Dow Jones Industrial Average is up 269 points at 24,353. June crude oil is down $0.04 at $68.01. June heating oil is up $0.0119 while June RBOB gasoline is up $0.0117 and June natural gas is up $0.030.

Corn:

July corn gave back a half-cent Thursday in a quiet day of trading. The Corn Belt continues to enjoy gradually warmer temperatures and has four more days of mostly dry weather ahead before moderate to locally heavy rains are expected to cover much of the Midwest. Thursday's U.S. Drought Monitor still showed an area of moderate drought in southern Iowa and northern Missouri that should benefit from next week's rain. In Brazil, the second corn crop continues to face a dry five-day forecast as pollination time gets closer.
Last week's corn export sales were light, but shipments are still giving corn a chance to reach USDA's 2.225 billion bushel goal. USDA said last week's export sales and shipments of corn totaled 27.4 and 67.0 million bushels respectively, a neutral-to-bearish showing for the week. Mexico was listed as last week's top buyer, another reminder of how important a new NAFTA agreement is to grain prices. Total corn shipments are now down 18% in 2017-18 from a year ago. USDA also said 4.2 million bushels (107,600 mt) of U.S. corn were sold to unknown destinations for 2017-18. Fundamentally, the outlook for corn prices remains neutral with plenty we still don't know about the new season ahead. Technically, the trend remains sideways in May corn and up in new-crop corn. DTN's National Corn Index closed at $3.56 Wednesday, back near its highest prices since June 2016 and priced 30 cents below the May contract. In outside markets, the yield on 10-year T-notes is slightly lower, back below 3%, but Thursday's higher than expected increase in durable goods orders is helping the June U.S. dollar index trade up 0.36.

Soybeans:

July soybeans closed up a quarter-cent at $10.39 1/2 after a day of light volume trading. Corn planting prospects are looking better than they did earlier this month, but progress may still be slow for a while as next week's rain and cool temperatures keep conditions less than ideal. So far however, there is little concern that corn or soybean planting decisions will change much from earlier intentions. Demand for U.S. soybeans remains a serious concern for prices, especially in 2017-18 as Brazil's soybeans should keep China well-supplied, at least through summer. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 13.6 and 16.4 million bushels respectively, a neutral-to-bearish combination that keeps total shipments down 13% from a year ago. Indonesia was named last week's top buyer and the only mention of China was for a small sales cancellation. Fundamentally, the outlook for soybean prices is bullish outside the U.S. with China's bids keeping Brazil's soybean prices near their highest level in over a year and a half. Here in the U.S., the fundamental outlook still leans bearish for old-crop soybean prices while China keeps its U.S. receipts to a minimum. 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 $9.59 Wednesday, roughly in the middle of its April range and priced 68 cents below the May contract.

Wheat:

July Chicago wheat closed down 9 1/2 cents and July K.C. wheat was down 5 1/2 cents at $5.21, giving back part of Wednesday's double-digit gains. The southwestern Plains are expecting another five days of dry weather after Wednesday's showers moved through. Thursday's U.S. Drought Monitor, which does not include Wednesday's rain, showed some sign of worsening in the region, but was not much different than a week ago. In spite of this year's drought, generating much demand for winter wheat has been a bearish hurdle that has almost no chance of going away before the current season ends on May 31. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 10.9 and 21.6 million bushels respectively, bearish amounts that have total wheat shipments down 11% in 2017-18 from a year ago. Fundamentally, it is going to be difficult for wheat prices to make new highs as long as crop conditions in major wheat regions are favorable. Technically, the trends remain sideways for all three wheats, continuing to show support from the anticipation of lower production in the U.S. DTN's National SRW index closed at $4.57 Wednesday, near its high for April and 29 cents below the May contract. DTN's HRW index closed at $4.44, also in the middle of its April range.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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