DTN Closing Grain Comments

HRW Wheat Charges Higher Into Hot Holiday Weekend

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

General Comments:

Corn closed up 1 3/4 cents in the July contract and was up 2 1/2 cents in the December. Soybeans closed up 5 3/4 cents in the July and up 6 cents in the November. Wheat closed up 12 3/4 cents in the July Chicago, up 15 cents in the July Kansas City, and up 9 1/2 cents in the July Minneapolis.

The June U.S. dollar index is up 0.41 at 94.11. August gold is down $1.60 at $1,308.20, while July silver is down 14 cents and July copper is down 0.0195. The Dow Jones Industrial Average is down 88 points at 24,724. July crude oil is down $2.90 at $67.81. July heating oil is down $0.0571, while July RBOB gasoline is down $0.0558 and July natural gas is down $0.004.

For the week:

July corn closed up 3 1/2 cents and December was up 4 3/4 cents. July soybeans were up 43 cents while the November was up 45 1/4 cents. July Chicago wheat was up 24 3/4 cents, July Kansas City wheat was up 25 1/4 cents, and July Minneapolis wheat was up 15 1/4 cents.

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Corn:

July corn ended up 1 3/4 cents at $4.06 Friday and was up 3 1/2 cents on the week, mildly supported by ongoing dry weather in Brazil and early concerns of encroaching dry weather here in the U.S. Friday's satellite for Brazil showed mostly clear skies once again, while the seven-day forecast expects more of the same. Here in the U.S., scattered showers were offering a little help to conditions in Oklahoma and Missouri, while the rest of the Corn Belt was mostly dry and favorable for planting. Adequate soil moisture, however, continues to be a concern around northern Missouri and North Dakota. With Brazil still dry and the new-crop season still young, 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 and others reported that Saudi Arabia and Russia are discussing production increases for later in 2018.

Soybeans:

July soybeans closed up 5 3/4 cents at $10.41 1/2 on low volume Friday and was up 43 cents on the week, helped by last weekend's news that China and the U.S. suspended proposed tariffs, while negotiations were taking place. Soybean traders may also find it hopeful to hear that U.S. Commerce Secretary Ross is expected to visit China in early June to keep the talks moving forward. This year's soybean market is split in two ways. First, after Argentina's drought earlier this year, soybean supplies in South America are tighter than they are here in the U.S. Second, while China benefits from Brazil's record harvest this summer, new-crop soybeans are showing more buying interest than old-crop soybeans. Early Friday, 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. Here in the U.S., soybean planting is going well, but there is an encroaching pattern of dry conditions in the south-central Midwest that needs to be watched. Going into Memorial Day, the trends are sideways in both, July and new-crop soybeans with new-crop futures spreads showing 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 closed up 12 3/4 cents and July K.C. wheat was up 15 cents at $5.64 Friday, posting decent gains for the week with support coming from hot temperatures in the southwestern U.S. Plains adding insult to extreme drought conditions already in place. While it is too early to have a confident opinion on how world wheat production will go in 2018, drought in the southwestern U.S. has chased the short side of the wheat market back and dominated the conversation so far. Dry conditions are also a concern in Australia and the western Canadian Prairies, and we'll have to wait to see how things go from Europe to southern Russia. The International Grain Council expects world production to drop from 758 mmt to 742 mmt in 2018-19, so there is a chance for bearish pressures to ease somewhat, even before weather has its say. As we pack picnic lunches for Memorial Day, 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. DTN's National HRW index closed at $5.13 Thursday, near its highest price in over two years. Trading in U.S. grain futures will resume Monday evening at 7 p.m. CDT.

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

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

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Todd Hultman