DTN Before The Bell Grain Comments

Morning CME Globex Update:

Winter wheat contracts are starting lower for a second day, falling back from Thursday's new highs, while world prospects remain mostly favorable. July soybeans were also lower at the start of a second day after Friday's trade talks with China showed little progress.

Other Markets:

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

Corn:

July corn was down 3 cents early Monday, a day when grains are starting mostly lower and outside commodities are mostly higher. Corn planting made more progress over the weekend and should have a couple more days of favorable weather before more rain shows up across the Midwest after Wednesday. Friday's CFTC data showed noncommercials grew more bullish in corn as of May 1, increasing net-longs from 333,416 to 393,707, the second most since 2011. While the heavy load of noncommercial positions could become a bearish factor at some point, it is currently finding support from the current stretch of dry weather in Brazil, which so far, is a significant threat to Brazil's corn production. Technically, last 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 246 delivery intentions in May corn early Monday. DTN's National Corn Index closed at $3.70 Friday, 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 0.24, challenging its highest prices in four months.

Soybeans:

July soybeans were down 6 3/4 cents early, near its lowest prices in a month, starting a second day lower after last week's trade talks in China ended without significant agreement. Before the talks began, Friday's CFTC data showed noncommercials still bullish in soybeans with 203,160 net-longs as of May 1, near the most in 21 months. Even more bullish than that is soybean meal where noncommercials held 167,456 net-longs, the most on record, inspired by Argentina's drought earlier this year. With planting prospects looking better for row crops in May and trade talks with China showing no progress, it may become difficult for old-crop soybeans to maintain that level of bullishness as U.S. exports are dragging. Technically, the trend is sideways in July soybeans and a close below $10.27 would be bearish. For May contracts, the CME Group reported 68 delivery intentions for soybeans, 0 for meal, and 108 for soybean oil early Monday. DTN's National Soybean Index closed at $9.64 Friday, in the middle of its April range and priced 73 cents below the July contract.

Wheat:

July Chicago wheat was down 9 1/4 cents early, falling back a second day from Thursday's new nine-month high. Both Chicago and Kansas City wheat have traded higher the past month while drought continued to afflict the southwestern U.S. Plains. However, higher wheat prices may be difficult to sustain when there is so much not yet known about how this year's world production will go. Also, noncommercial traders in Chicago wheat have shown a knack for getting bullish at the wrong time, and they just did it again on May 1. Friday's CFTC data showed noncommercials turned net-long in Chicago wheat, holding 23,316 contracts as May began. Technically, Tuesday's higher closes turned the trends higher for the July contracts of both, Chicago and K.C. wheat. For May contracts, early Monday showed 10 delivery intentions for K.C. wheat, none for Minneapolis wheat, and still none for Chicago wheat. DTN's National SRW index closed at $4.94 Friday, down from 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

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.