DTN Before The Bell Grain Comments

Morning CME Globex Update:

July contracts of corn, soybeans, and all three wheats were starting higher again Thursday with ongoing support from adverse weather while trade talks continue with China. At 8 a.m. CDT, USDA announced 9.7 million bushels (264,000 mt) of new-crop soybeans were sold to unknown destinations. An earlier sale of 5.2 million bushels (132,000 mt) of sorghum for 2017-18 was cancelled by unknown.

Other Markets:

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

Corn:

July corn was up 2 1/2 cents at the morning break, trading at a new ten-month high while Brazil's weather remains dry. Once again, Thursday's satellite map and seven-day forecast show little hope for rain on Brazil's corn crop, adding to hopes that U.S. corn exports will be helped. Early Thursday, USDA said last week's export sales and shipments of corn totaled 33.6 and 57.8 million bushels respectively, a neutral showing for the week that has total corn shipments down 12% in 2017-18 from a year ago with three and a half months left in the season. Thursday's U.S. Drought Monitor showed mostly favorable conditions around the Corn Belt, except for moderate drought around northern Missouri. Fundamentally, corn prices continue to find support from Brazil's dry weather and that has the trends remain up for both, July corn and new-crop corn. At 8 a.m. CDT, USDA said an earlier sale of 5.2 million bushels (132,000 mt) of sorghum for 2017-18 was cancelled by unknown. DTN's National Corn Index closed at $3.75 Wednesday, its highest price in 23 months and priced 34 cents below the July contract. In outside markets, the June U.S. dollar is down 0.21 while most commodities are higher, except for energies.

Soybeans:

At 8 a.m. CDT, USDA announced 9.7 million bushels (264,000 mt) of new-crop soybeans were sold to unknown destinations. July soybeans were up 9 1/4 cents earlier Thursday, continuing to benefit from trade progress with China and news of a truckers' strike in Brazil. Dow Jones reported late Wednesday that Brazil's oil company, Petrobas, would lower diesel prices by 10% for 15 days in an effort to ease tensions with a presidential election just four months away. While prices have responded higher to this week's news that China's proposed 25% tariff on soybeans is now on hold, actual demand for old-crop soybeans remains a bearish concern. Early Thursday, USDA said last week showed a net sales cancellation of 5.1 million bushels, stemming from last Friday's announced cancellation from unknown. Soybean shipments totaled 33.2 million bushels, a bearish combination that has total shipments now down 11% in 2017-18 from a year ago. Technically, the trends are now sideways in both, July and new-crop soybeans where futures spreads continue to show a bullish commercial outlook. DTN's National Soybean Index closed at $9.73 Wednesday, up from its lowest prices in three months and priced 67 cents below the July contract.

Wheat:

July Chicago wheat was up 8 1/4 cents and July K.C. wheat was up 6 3/4 cents early Thursday, back near their highest prices in ten months as drought in the southwestern U.S. Plains continues to compete for attention with more favorable conditions outside North America. Thursday's U.S. Drought Monitor showed slight improvement in the western Plains, but not enough to offer much help to this year's winter wheat crops. At the same time, Sep. Minneapolis wheat is up 1 3/4 cents, trading at a new six-month high with help from increased commercial demand. The one factor that has been consistently not bullish for wheat is exports and that did not change Thursday. USDA said last week's export sales and shipments of old-crop wheat totaled 4.1 and 13.3 million bushels, another bearish showing for the week. New crop wheat sales totaled 12.5 million bushels. Fundamentally speaking, there is a lot of wheat in the world, but technically, the trends are currently higher for all three wheats. DTN's National SRW index closed at $5.01 Wednesday, near its highest price in ten months and 30 cents below the July contract.

Todd Hultmancan be reached at todd.hultman@dtn.com

Follow him on Twitter: www.twitter.com/ToddHultman1

(KR)

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