DTN Closing Grain Comments

Soybeans Recover Some Lost Ground

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

General Comments:

Corn was up 2 1/2 cents in the July contract and up 3 cents in the December. Soybeans were up 8 3/4 cents in the July contract and up 7 1/4 cents in the November. Wheat closed up 3 cents in the July Chicago contract, down 1 1/4 cents in the July Kansas City, and up 3 cents in the July Minneapolis contract.

The June U.S. dollar index is up 0.35 at 92.94. June gold is down $0.40 at $1,313.70, while July silver is down 2 cents and July copper is down $0.0170. The Dow Jones Industrial Average is down 59 points at 24,298. June crude oil is down $1.17 at $69.55. June heating oil is down $0.0202, while June RBOB gasoline is down $0.0181 and June natural gas is down $0.012.

Corn:

July corn ended up 2 1/2 cents Tuesday at $4.03 1/4, a modest bounce that keeps prices near last week's new eight-month high. Late Monday, USDA said 39% of corn was planted and 8% had emerged, a little closer to their respective five-year averages. Among corn's top-producing states, Missouri and Illinois are leading the way at 78% and 74% planted, respectively. Northern states are behind their usual paces with the biggest delay in Minnesota where 9% of corn is planted, down from its five-year average of 44%. This week's weather will add to northern delays with moderate to heavy rain expected from Wyoming to Michigan, along with cooler temperatures. The bullish news for corn prices continues to be Brazil's dry weather. Tuesday's seven-day forecast remains mostly dry, except for a chance of light to moderate showers in the south-central region. In ethanol news, tweets by Sens. Ted Cruz and Charles Grassley suggest a White House decision has been made that will allow E15 sales year-round. As the Grassley tweet said, "Devil in details." For now, the trends remain up in both July and new-crop corn. CME Group reported 314 delivery intentions in May corn early Tuesday. DTN's National Corn Index closed at $3.65 Monday, still 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 0.35 and June crude oil is down $1.17 in volatile trading after CNN reported President Donald Trump has decided to withdraw from the Iran nuclear deal and reinstate sanctions against Iran. Monday's close in spot crude oil was the first above $70 a barrel in three years.

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Soybeans:

July soybeans closed up 8 3/4 cents at $10.20 1/4 Tuesday with help from a return of commercial buying in both soybeans and meal one day after Monday's prices suffered from a lack of buying interest. Tuesday's revived interest may have been a show of short-term bargain-hunting, but if it was related to an impending export sale, it would offer some encouragement to a market that has seen 13% fewer soybean shipments in 2017-18. China, of course, remains the wildcard and shows no sign so far of backing down from its 25% tariff proposal on U.S. soybeans. Late Monday, USDA said 15% of soybeans have been planted, slightly ahead of their usual pace. Most states are either close to or ahead of their five-year averages. As with corn, the biggest delay is seen in Minnesota where only 1% of soybeans have been planted. Technically, the trend is down in July soybeans, but remains sideways in November soybeans. For May contracts, the CME Group reported 68 delivery intentions for soybeans and zero for meal and soybean oil early Tuesday. DTN's National Soybean Index closed at $9.40 Monday, its lowest price in over two months and priced 72 cents below the July contract.

Wheat:

July Chicago wheat closed up 3 cents and July K.C. wheat was down 1 1/4 cents at $5.38 1/4 Tuesday. It was a quiet day of trading after no surprises were found in Monday's Crop Progress report. USDA said one-third of winter wheat was headed and 34% was rated good to excellent, the lowest since 2014. The state of Washington has the best winter wheat, rated 83% good to excellent while half of the Kansas crop is still poor to very poor. Given the severity of this year's drought in the southwestern U.S. Plains, it is surprising that a Dow Jones survey only expects U.S. winter wheat production to be down 89 million bushels from a year ago, at 1.18 billion bushels, but there is still time for that to change. Outside of North America, dryness in Australia remains an early concern, but other wheat regions don't seem to have serious problems yet. Technically, the trends turned higher last week for the July contracts of both Chicago and K.C. wheat, but it may be difficult for wheat prices to stay near their nine-month highs, unless new problems develop. No delivery intentions were reported Tuesday for all three wheats and May Chicago wheat had 84 contracts open as of early Tuesday. DTN's National SRW index closed at $4.79 Monday, down from its highest price in nine months and 32 cents below the July contract. DTN's National HRW index closed at $4.95 Monday, 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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman