DTN Closing Grain Comments

General Comments:

Corn was down 1/2 cent in the July contract and unchanged in the December. Soybeans were down 4 1/2 cents in the July contract and down 1 cent in the November. Wheat closed down 4 cents in the July Chicago contract, down 6 3/4 cents in the July Kansas City and down 2 3/4 cents in the July Minneapolis contract.

The June U.S. dollar index is down 0.09 at 92.86. June gold is down $0.60 at $1,313.10 while July silver is up 7 cents and July copper is up $0.0025. The Dow Jones Industrial Average is up 206 points at 24,566. June crude oil is up $2.13 at $71.19. June heating oil is up $0.0590 while June RBOB gasoline is up $0.0560 and June natural gas is up $0.004.

Corn:

July corn ended down a half-cent at $4.02 3/4 Wednesday, a quiet day of trading ahead of Thursday's next WASDE report from USDA. Dow Jones' survey of analysts expect old-crop ending corn stocks to drop slightly, to 2.18 billion bushels (bb) while ending corn stocks for the new 2018-19 season drop to 1.63 bb, based on an early guess of a 14.1 bb crop. USDA's estimate of world ending corn stocks are also expected to drop, from 7.68 bb (195.2 mmt) in 2017-18 to 7.17 bb (182.0 million metric ton) in 2018-19. Keep in mind that new-crop estimates are too early to have any confidence in but will shape expectations and continue the conversation USDA started in December. Brazil's current stretch of dry weather continues to be a source of bullish support for corn price as the seven-day forecast is mostly dry, except for chances of moderate rain in the south-central region. Fundamentally, the outlook for corn prices is neutral-to-bullish compared to where they have been the past three years. Technically, the trends remains up in both, July and new-crop corn. CME Group reported 124 delivery intentions in May corn early Wednesday. DTN's National Corn Index closed at $3.68 Tuesday, still near its highest price in 22 months and priced 35 cents below the July contract. In outside markets, the June crude oil is up $2.13, pushing a new three-year high after President Trump withdrew from the Iranian nuclear deal on Tuesday. The June U.S. dollar index is down 0.09 after the U.S. Labor Department said producer prices were up 2.6% in April from a year ago, slightly less than expected.

Soybeans:

July soybeans closed down 4 1/2 cents at $10.15 3/4 Wednesday, still under pressure after last week's meeting in Beijing did nothing to ease concerns about China's 25% tariff proposal. Dow Jones' survey expects USDA to slightly reduce its estimate of old-crop soybeans from 550 million bushels (mb) to 541 mb, but it is difficult to see how that will happen with the current pace of U.S. soybean shipments down 13% from a year ago, below USDA's projected 5% drop. That also makes the survey's new-crop estimate of 549 mb suspect, based on a 4.3 bb crop in 2018. Given this year's trade concerns with China, soybean prices have held up fairly well, but the recent disappointment in Beijing plus the possibility of another record U.S. planting is keeping prices under bearish pressure. Technically, the trend is down in July soybeans, but still sideways in November soybeans. For May contracts, the CME Group reported 68 delivery intentions for soybeans, but none for meal and soybean oil early Wednesday. DTN's National Soybean Index closed at $9.49 Tuesday, up from its lowest price in over two months and priced 71 cents below the July contract.

Wheat:

July Chicago wheat closed down 4 cents and July Kansas City wheat was down 6 3/4 cents at $5.31 1/2, partly responding to news of beneficial rains in western Ukraine and southern Russia. Except for early dryness in Australia, most of the world's wheat regions are doing well outside of North America, leading the International Grains Council to estimate a 2018-19 a slightly lower world wheat crop of 27.2 bb (739 mmt). Dow Jones' survey expects world wheat ending stocks to make a small drop, from 9.97 bb (271.3 mmt) in 2017-18 to 9.84 bb (267.7 mmt) in 2018-19. Again, the new-crop estimates provide a starting point in a discussion that has a long way to go. Here in the U.S., Dow Jones' survey expects U.S. wheat ending stocks to drop only slightly in 2018-19, from 1.07 bb in 2017-18 to 923 mb in 2018-19. Fundamentally, as long as most of the world's wheat regions appear to be doing well in 2018, it will be difficult for wheat prices to trade above last week's nine-month highs. Technically, the trends turned higher last week for the July contracts of both, Chicago and K.C. wheat. There were no deliveries for May wheat contracts early Wednesday. DTN's National SRW index closed at $4.82 Tuesday, down from its highest price in nine months and 32 cents below the July contract. DTN's National HRW index closed at $4.95, 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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