DTN Closing Grain Comments

General Comments:

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

The June U.S. dollar index is down 0.20 at 93.72. June gold is up $14.90 at $1,304.50, while July silver is up 29 cents and July copper is up $0.0285. The Dow Jones Industrial Average is down 71 points at 24,816. July crude oil is down $1.09 at $70.75. July heating oil is down $0.0228, while July RBOB gasoline is down $0.0257 and July natural gas is up $0.014.

Corn:

July corn closed down 4 1/4 cents at $4.04 1/4 Thursday after trading at a new 10-month high earlier in the day. The satellite map and seven-day forecast for Brazil remain dry and threatening to this year's corn yields. Meanwhile, U.S. export sales have slowed with the only daily announcement for corn in May showing up Wednesday as an optional origin sale. 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 as of May 17. USDA also said later that an earlier sale of U.S. sorghum was cancelled, 5.2 million bushels (132,000 mt) to unknown for 2017-18. Thursday's U.S. Drought Monitor showed mostly favorable conditions around the Corn Belt, except for an encroaching threat of moderate drought around northern Missouri and southern Iowa. Fundamentally, corn prices continue to find support from Brazil's dry weather and that is keeping the trends up for both, July corn and new-crop corn. 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 0.20 after two weaker-than-expected economic reports and news that President Trump cancelled the June 12 meeting with North Korea.

Soybeans:

July soybeans closed down 3 1/2 cents at $10.35 3/4 Thursday, ending the week's bullish streak after trade talks over the weekend showed progress with China. It is still not certain how negotiations will turn out, and President Trump has expressed concerns that it will be difficult to get a deal that can be verified. Even so, as long as China's proposed tariff is off the table, soybean traders seem relieved of at least one bearish concern. The bigger challenge is to find more demand for U.S. old-crop soybeans while China takes advantage of Brazil's record harvest. Early Thursday, USDA said last week showed a net sales cancellation of 5.1 million bushels, stemming from last Friday's announced cancellation of 30 million bushels from unknown. Soybean shipments totaled 33.2 million bushels for the week, a bearish combination that has total shipments now down 11% in 2017-18 from a year ago. At 8 a.m. CDT, USDA said 9.7 million bushels (264,000 mt) of new-crop soybeans were sold to unknown destinations. Fundamentally speaking, Argentina's drought in 2018 keeps Brazil in a tight supply situation and raises the stakes for the U.S. to have another successful soybean harvest this fall. Technically, the trends are now sideways in both July and new-crop soybeans, as new-crop 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 closed down 3/4 cent and July K.C. wheat was down 2 3/4 cents at $5.49, after toying with their highest prices in 10 months. Traders still can't be sure yet how this year's world wheat production will turn out. The U.S. winter wheat crop is having obvious problems with extreme to exceptional drought hanging on around the Texas Panhandle with little rain expected in the seven-day forecast. Dry conditions are also a concern in Manitoba, southern Saskatchewan, Australia and in areas near the Black Sea. The International Grains Council said Thursday that they expect world wheat production to fall from 758 to 742 mmt in 2018-19 and ending stocks to decrease, from 262 to 258 mmt -- slightly more than they expected a month ago. Here in the U.S., moving old-crop wheat supplies remains difficult. 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. Technically, the trends are currently higher for all three wheats with weak fundamental arguments underneath, unless further weather problems develop. DTN's National SRW index closed at $5.01 Wednesday, near its highest price in 10 months and 30 cents below the July contract. DTN's National HRW index closed at $5.14, near its highest price in over two years.

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

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

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