DTN Before The Bell Grain Comments

Morning CME Globex Update:

July soybeans were down 11 1/2 cents early Friday after two days of trade talks ended without any specific agreement for ag products. Winter wheat prices were also lower early in spite of a mostly dry forecast for the western half of the U.S.

Other Markets:

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

Corn:

July corn was down 1 1/4 cents early Friday but is still staying near its highest prices in eight months, with plenty of attention on Brazil's second corn crop. Not surprisingly, Brazil's satellite map remains mostly dry on Friday, facing another dry-looking seven-day forecast while corn goes through its pollination stage. That bullish potential is keeping noncommercials on the long side of corn and sellers cautious, at least until Brazil's new crop gets a better assessment. U.S. corn exports are also gradually picking up and still have a chance to reach USDA's 2.225 billion bushel goal. Technically, Tuesday's higher close turned the trend up in July corn, in line with what it already was in new-crop corn. CME Group reported 223 delivery intentions in May corn early Friday. DTN's National Corn Index closed at $3.72 Thursday, near its highest price in 22 months and priced 36 cents below the July contract. In outside markets, the June U.S. dollar index is up 0.04 after U.S. trade talks with China made minor progress. Early Friday, the U.S. Commerce Department said non-farm payrolls increased by 164,000 in April, a little less than expected. The U.S. unemployment rate improved from 4.1% to 3.9%, the lowest since 2000, reported Dow Jones.

Soybeans:

July soybeans were down 11 1/2 cents early Friday, erasing Thursday's late buying surge as two days of talks with Chinese officials found little to ease the concerns of soybean traders. According to the Wall Street Journal, a plea to not target farmers or ag products was on the list of demands the U.S. was seeking, but no agreement was reached. If there is anything hopeful about this week's meeting, it is that both sides agreed to keep the conversation going. Here in the U.S., the next five days is likely to see an increase in the pace of row-crop planting before more rain comes to the central Midwest next week. Technically, the trend is sideways in old-crop soybeans and up in new-crop soybeans, but even new-crop prices appear to be stalling now. For May contracts, the CME Group reported 60 delivery intentions for soybeans, 52 for meal, andfive for soybean oil early Friday. DTN's National Soybean Index closed at $9.80 Wednesday, down from its April high and priced 73 cents below the July contract.

Wheat:

July Chicago wheat was down 6 cents and July Kansas City wheat was down 7 1/4 cents, showing hesitation after punching through to new nine-month highs on Thursday. May Chicago wheat is down 3 1/2 cents, but holding this week's surprising gain after making it through the week without a single delivery notice. Renewed commercial demand for Chicago wheat remains this week's bullish surprise after so little demand was shown just a month ago. Except for the Pacific Northwest, eastern South Dakota, and southern Texas, Friday's seven-day forecast shows almost no rain expected for the western half of the U.S. -- not good news for winter wheat crop conditions. Outside of North America, dryness remains a concern in Australia, and we are watching above-normal temperatures in Ukraine and southern Russia, but crop conditions are still generally favorable so far. Technically, Tuesday's higher closes turned the trends higher for the July contracts of both, Chicago and K.C. wheat. For May contracts, early Friday showed 24 delivery intentions for K.C. wheat, 5 for Minneapolis wheat, and still none for Chicago wheat. DTN's National SRW index closed at $5.05 Thursday, its highest price in nine months and 33 cents below the July contract.

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

FollowTodd on Twitter @ToddHultman1

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