DTN Closing Grain Comments

General Comments:

Corn was down 3/4 cent in the July contract and down 1/2 cent in the December. Soybeans were down 10 1/4 cents in the July contract and down 9 3/4 cents in the November. Wheat closed down 2 1/2 cents in the July Chicago contract, up 2 1/4 cents in the July Kansas City, and up 1 cent in the July Minneapolis contract.

The June U.S. dollar index is up 0.03 at 92.28. June gold is up $4.40 at $1,311.20 while May silver is up 36 cents and May copper is up $0.0430. The Dow Jones Industrial Average is up 56 points at 24,155. June crude oil is down $0.60 at $67.85. June heating oil is up $0.0186 while June RBOB gasoline is down $0.0061 and June natural gas is down $0.053.

Corn:

July corn closed down 3/4 cent Wednesday, a quiet day of trading after Tuesday's new eight-month high. Dry weather in Brazil continues to provide the most bullish hope for corn prices lately with the second corn crop in pollination and Wednesday's seven-day forecast showing little hope for rain. Brazil's FOB corn price of $4.76 is its highest price since March, but still favorable for export business as prices are 20 cents higher in New Orleans. Here in the U.S., the central Midwest has chances for severe weather through Thursday, which may interrupt planting, but the forecast looks drier and warmer after that. Fundamentally speaking, there is plenty of corn being stored in the US and cash prices at their highest level in 22 months should be tempting to producers incurring monthly storage costs. However, talk of dry weather in Brazil has potential sellers reluctant to act. The U.S. Energy Department said ethanol production increased from 985,000 to 1.032 million barrels per day last week, a supportive level for corn prices. Technically, Tuesday's higher close turned the trend up in July corn, in line with what it already has been in new-crop corn. CME Group reported 569 delivery intentions in May corn early Wednesday. DTN's National Corn Index closed at $3.68 Tuesday, its highest price in 22 months and priced 38 cents below the July contract. In outside markets, the June US dollar index is up 0.03 after the Federal Reserve concluded its two-day meeting and kept the federal funds rate target unchanged, as expected. The payroll firm, ADP said early Wednesday there were 204,000 new private sector jobs in April, slightly more than expected, reported RTTNews.com.

Soybeans:

July soybeans dropped 10 1/4 cents to $10.43 on a quiet day of low-volume trading as US officials prepare to talk trade with China on Thursday. Few seem willing to predict what might happen as US negotiators range from a hopeful Treasury Secretary Mnuchin on one hand to a more hostile anti-China White House adviser, Peter Navarro, on the other. US soybean prices have a lot at stake in the outcome and, if China were willing to back down from its tariff proposal on US soybeans, US prices could see a significant bullish response. Until China becomes a willing buyer again, it is difficult to make a bullish case for old-crop soybeans as US soybean shipments are down 13% from a year ago. As far as this year's planting goes, the forecast looks much better for row crops after Thursday. Technically, the trend is sideways in old-crop soybeans and up in new-crop soybeans with a lot riding on the state of US trade relations with China. For May contracts, the CME Group reported 146 delivery intentions for soybeans, 70 for meal, and 17 for soybean oil early Wednesday. DTN's National Soybean Index closed at $9.78 Tuesday, down from its highest price in over a year and priced 75 cents below the July contract.

Wheat:

July Chicago wheat closed down 2 1/2 cents and July K.C. wheat was up 2 1/4 cents at $5.55 1/4 as tour scouts collected a second day of field observations on the Wheat Quality Council's HRW wheat tour. Tuesday's tour finished with an estimated yield of 38.2 bushels an acre, down from last year's 43.0 bushels. The effects of drought were obvious and came as no surprise. Scouts also noted areas of freeze damage and the disease, wheat streak mosaic. Some scouts even acknowledged 38.2 bushels may be too high for what they saw. The more difficult problem of course is keeping track of the other 95% of world wheat production. So far, early wheat conditions are generally favorable outside of North America, except for dryness in Australia. Technically, Tuesday's higher closes turned the trends higher for the July contracts of both, Chicago and K.C. wheat. For May contracts, the CME Group reported 256 delivery intentions for K.C. wheat, but still none for Chicago wheat. MGEX had no delivery intentions for Minneapolis wheat early Wednesday. DTN's National SRW index closed at $4.93 Tuesday, its highest price in nine months and 36 cents below the July contract. DTN's HRW index closed at $5.01, its highest prices in over two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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