DTN Closing Grain Comments

Chicago Wheat Still Popular, Leads Grains Higher

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

General Comments:

Corn was up 5 cents in the July contract and up 4 1/4 cents in the December. Soybeans were up 4 3/4 cents in the July contract and up 5 3/4 cents in the November. Wheat closed up 18 3/4 cents in the July Chicago contract, up 15 1/2 cents in the July Kansas City, and up 8 cents in the July Minneapolis contract.

The June U.S. dollar index is up 0.62 at 92.25. June gold is down $12.20 at $1,307.00 while May silver is down 23 cents and May copper is down $0.0315. The Dow Jones Industrial Average is down 184 points at 23,979. June crude oil is down $1.38 at $67.19. June heating oil is down $0.0466 while June RBOB gasoline is down $0.0463 and June natural gas is up $0.030.

Corn:

July corn closed up a nickel at $4.05 3/4 Tuesday, its highest price in eight months. Brazil's seven-day forecast continues to look dry for the week ahead, a critical time as the second corn crop reaches pollination. Also indicating crop problems, Brazil's FOB price for corn is trading at $4.74, its highest price since March, but also some 21 cents below the FOB corn price in New Orleans. Here in the U.S., USDA said 17% of corn was planted, down from the five-year average of 27%. More progress was evident in Missouri and Illinois while Iowa was 17% planted. Planting may be difficult the next few days due to severe weather from the southwestern Plains into the central Midwest, but overall progress should continue with soils gradually warming. Technically, Tuesday's new high in July corn turned the trend higher and is now in agreement with the uptrend in new-crop corn. CME Group reported 576 delivery intentions in May corn early Tuesday. DTN's National Corn Index closed at $3.63 Monday, its highest price in 22 months and priced 38 cents below the July contract. In outside markets, the June U.S. dollar index is up 0.62 after the U.K. posted a weaker-than-expected manufacturing report early Tuesday. The Federal Reserve began its two-day meeting, but is not expected to raise the federal funds rate when it concludes on Wednesday.

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Soybeans:

July soybeans ended up 4 3/4 cents at $10.53 1/4 Tuesday, a modest gain considering July soybean meal jumped up $10.60 to a new contract high with help from a return of commercial buying related to this year's drought in Argentina. Currently, both July and November soybeans are staying below their April highs, showing some caution ahead of Thursday when U.S. and Chinese officials meet to discuss trade differences. With China's proposed 25% tariff on U.S. soybeans on the table, this week's talks could have market-making news or end in disappointment -- it is difficult to guess at this point. Late Monday, USDA said 5% of soybeans were planted, mainly in southern states and on pace with the five-year average. The main bearish concern for U.S. soybean prices continues to be the absence of China's demand, but so far, noncommercial traders remain bullish and spot soybean prices are holding above $10.00. The trend is currently sideways in old-crop soybeans and up in new-crop soybeans. For May contracts, the CME Group reported 145 delivery intentions for soybeans, 52 for meal, and 265 for soybean oil early Tuesday. DTN's National Soybean Index closed at $9.72 Monday, down from its highest price in over a year and priced 77 cents below the July contract.

Wheat:

July Chicago wheat closed up 18 3/4 cents at $5.29 1/4, just below its high in March as the May contract showed more signs of panic-buying after a second day of no delivery announcements. July K.C. wheat was up 15 1/2 cents at $5.53 after USDA said Monday that 19% of winter wheat was headed and 33% was rated good-to-excellent, the same as was seen this time of year in 2014. Half of the winter wheat in Kansas was rated either poor or very poor as tour scouts are seeing for themselves Tuesday, the first day of the Wheat Quality Council's HRW wheat tour. DTN's Mary Kennedy is on the tour and will be giving an update later Tuesday. Sep Minneapolis wheat closed up 8 1/4 cents after USDA also said 10% of spring wheat was planted, which is below the five-year average of 36% for this time of year. South Dakota made a little progress and is 12% planted, but the ground in the northern states could still use warmer temperatures after a winter storm hit just over two weeks ago. Outside of North America, crop conditions are generally favorable for wheat so far, but we will continue to monitor. Technically, Tuesday's higher closes turned the trends higher for the July contracts of Chicago and K.C. wheat. For May contracts, the CME Group reported 159 delivery intentions for K.C. wheat and MGEX reported 152 for Minneapolis wheat early Tuesday. DTN's National SRW index closed at $4.79 Tuesday, its highest price since July and 31 cents below the July contract. DTN's HRW index closed at $4.76, near its highest prices in two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman