DTN Before The Bell Grain Comments

Morning CME Globex Update:

Once again, July contracts of corn, soybeans, and all three wheats were starting higher Friday, this time ahead of a three-day weekend. At 8 a.m. CDT, USDA said 11.5 million bushels (312,000 mt) of U.S. soybeans were sold to China for 2018-19. China also bought another 6.1 million bushels (165,000 mt) of new-crop soybeans on an optional origin contract.

Other Markets:

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

Corn:

July corn was up a penny early Friday, reclaiming a small part of Thursday's loss and staying close to its highest prices in ten months. Friday's satellite map remains dry over Brazil with virtually no rain expected the next seven days. Three-day weekends have a knack for revealing surprises so some traders may be reluctant to take positions home over the weekend. Here in the U.S., rain is benefitting drier areas from central Oklahoma to western Missouri and is also falling in northwestern Wisconsin. Northern states should have a good few days of planting ahead before rain returns to the northwestern Plains on Monday. Overall, the new crop is off to a good start, but there is a whole season of uncertainty ahead. Technically, the trends are currently up for both, July corn and new-crop corn. DTN's National Corn Index closed at $3.71 Thursday, down from its highest price in 23 months and 34 cents below the July contract. In outside markets, July crude oil is down $1.92, on track for a fourth consecutive lower close after Bloomberg news reported that Saudi Arabia and Russia are discussing production increases for later in 2018.

Soybeans:

At 8 a.m. CDT, USDA said 11.5 million bushels (312,000 mt) of U.S. soybeans were sold to China for 2018-19. China also bought another 6.1 million bushels (165,000 mt) of new-crop soybeans on an optional origin contract. July soybeans were up 4 1/4 cents at the morning break, helped by light commercial buying in soybean meal. Soybean prices have benefited this week from last weekend's agreement between the U.S. and China to hold off on proposed tariffs while progress appears to be happening in trade talks. U.S. Commerce Secretary Ross is expected to return to China in early June to keep negotiations going. In the meantime, demand for old-crop soybeans in the U.S. continues to suffer with shipments down 11% in 2017-18 from a year ago. Time is currently in China's favor as they have a record Brazilian harvest to count on the next several months and so far, the new U.S. soybean crop is off to a good start. After Argentina's drought however, South American soybean supplies are tight and any weather threat in the U.S. this summer has potential for raising bullish anxieties. For now, the trends are 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 $9.69 Thursday, up from its lowest prices in three months and priced 66 cents below the July contract.

Wheat:

July Chicago wheat was up 6 3/4 cents and July K.C. wheat was 7 1/2 cents early Friday, showing bullish resilience near their highest prices in ten months. Drought in the southwestern U.S. Plains pushed noncommercial shorts out of the market early in 2018 and, now that prices are higher, short-sellers seem reluctant to return to winter wheat until they find out more about how the rest of the world's production will go. Not even Friday morning's rain in parts of Oklahoma and Kansas are offering much enticement for sellers. So far, dry conditions remain a concern in the western Canadian Prairie and in Australia. Other wheat regions appear mostly favorable, but it is still early in the new season. Fundamentally, the outlook for wheat prices continues to be tarnished by heavy supplies of old-crop wheat, both in the U.S. and around the world. Technically, the trends are currently higher for all three wheats. DTN's National SRW index closed at $5.00 Thursday, 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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