DTN Closing Grain Comments

General Comments:

Corn closed down 1 3/4 cents in the July contract and was down 1 1/4 cents in the December. Soybeans closed down 16 1/2 cents in the July and down 12 1/4 cents in the November. Wheat closed down 11 3/4 cents in the July Chicago, down 12 cents in the July Kansas City and down 7 cents in the July Minneapolis.

The June U.S. dollar index is up 0.16 at 92.41. June gold is up $1.70 at $1,314.40 while May silver is up 7 cents and May copper is up $0.0065. The Dow is up 355 points at 24,284. June crude oil is up $1.32 at $69.75. June heating oil is up $0.0373 while June RBOB gasoline is up $0.0310 and June natural gas is down $0.013.

For the week:

July corn closed up 7 3/4 cents and December was up 6 1/2 cents. July soybeans were down 19 1/2 cents while the November was down 9 3/4 cents. July Chicago wheat was up 27 3/4 cents, July Kansas City wheat was up 25 1/4 cents, and July Minneapolis wheat was up 15 cents.

Corn:

July corn closed down 1 3/4 cents at $4.06 1/4 Friday but was up 7 3/4 cents on the week, thanks to consistent support from dry weather in Brazil. After not showing much rain accumulation the past 30 days, Friday's satellite map was dry again for Brazil, and the seven-day forecast is also staying dry -- a recipe for lower yields while corn is pollinating. Here in the U.S., this week's storms are exiting the Corn Belt, making way for five days of dry weather and warm temperatures. That should allow for a quicker pace of row-crop planting before rain returns to the central Midwest next week. With Brazil's dry weather coming on the heels of this year's drought in Argentina, it makes for a bullish opportunity for corn prices before we learn more about the next U.S. crop. 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, at 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 0.16 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. Most commodities outside of ag are higher Friday.

Soybeans:

July soybeans finished down 16 1/2 cents at $10.36 3/4 and was down 19 1/2 cents on the week after the two-day trade meeting with China ended without significant agreement, other than to keep meeting. According to the Wall Street Journal, the U.S. did present China with a list of demands, which included not targeting farmers or ag products, but apparently $150 billion of proposed tariffs was not enough to make China budge just yet. Friday's conclusion erased Thursday's late gain and left soybean traders wondering if China will enact its proposed 25% tariff on U.S. soybeans. The difficulty for China is that Brazil's soybean exports typically run low by fall and U.S. soybeans will then be needed, especially after this year's drought in Argentina. This issue is not going away easily and may hang as a bearish fog over soybean prices for much of the summer. Technically, the trend is sideways in old-crop soybeans and up in new-crop soybeans, but even new-crop prices appear to be in a stall. For May contracts, the CME Group reported 60 delivery intentions for soybeans, 52 for meal, and five 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 closed down 11 3/4 cents and July K.C. wheat was down 12 cents at $5.55 3/4, saving a 25 1/4 cent gain on the week. The U.S. HRW wheat crop received extra attention this week, thanks to the Wheat Quality Council's HRW wheat tour. The tour finished Thursday with an estimated yield of 37.0 bushels an acre (bpa), down from 48.6 bpa year ago. Signs of drought were evident throughout much of the tour, especially in southwest Kansas and Oklahoma. Kansas wheat production was estimated at 243.3 million bushels for 2018, down 27% from last year's harvest. Estimates like these are difficult to count on this early in the year but highlight the obvious problems this year's winter wheat crop has been having. Speaking of early, there is plenty we have yet to learn about world wheat production in 2018 and this week's hotter temperatures in Ukraine are adding to the uncertainty. 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, five 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. DTN's HRW index closed at $5.21, at its highest price in two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

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