DTN Before The Bell Grain Comments

Morning CME Globex Update:

July contracts of corn, soybeans, and all three wheats were a little higher at Thursday's morning break, trying to earn back some of the week's losses. Rain is expected to benefit crops in the northern Plains and central Corn Belt the next few days.

Other Markets:

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

Corn:

July corn was up 2 3/4 cents Thursday, helped by early bargain hunting after Wednesday's prices fell to a new one-month low. Corn's one bullish factor is dry weather in Brazil and that situation remains bullish as the seven-day forecast remains dry, except for light rain expected in southern Brazil. Here in the U.S., rain is falling from Oklahoma into Missouri with more expected in the central Corn Belt the next three days. With extreme heat confined to the southwestern Plains and extreme precipitation limited to the southeastern U.S., crop conditions in the Corn Belt are generally favorable early in the new growing season. Fundamentally, the outlook for corn prices looks similar to what we've seen the past three years. Technically, the trends in corn are currently up for both, old-crop and new-crop corn. DTN's National Corn Index closed at $3.60 Wednesday, down from its highest price in 23 months and 33 cents below the July contract. In outside markets, the June U.S. dollar index is down 0.12 while other commodities are mixed.

Soybeans:

July soybeans were up 3 cents at $10.26 early Thursday, a light gain after a quiet overnight session. May's low of $9.92 1/2 will mark important support for the summer as the new soybean crops are off to a good start and old-crop exports have been difficult to find. The next weekly export sales report will be released early Friday due to this week's holiday and soybean sales are likely to be light again while Brazil's FOB soybean prices are currently more attractive for buyers and trade talks with China appear far from resolved. Brazil's truckers' strike has offered some hope for increased U.S. business, but these kinds of things don't usually have as much market impact as advertised. Technically speaking, the sideways trend in Nov soybeans is holding firm and new-crop spreads show active commercial support. The trend in July soybeans is also sideways, but lacks the same commercial support and demand for old-crop soybeans remains a bearish concern. DTN's National Soybean Index closed at $9.58 Wednesday, priced 65 cents below the July contract and staying below major resistance at $10.00.

Wheat:

July Chicago and K.C. wheat were both up 2 1/4 cents, looking for support after prices fell back from Tuesday morning's attempt at new ten-month highs. Drought remains a concern in the southwestern Plains, but it is also fair to say that the drought news is well known by now and so far, the world's other wheat regions aren't giving potential buyers much to be concerned about. Thursday's U.S. Drought Monitor showed increased dryness in North Dakota and central Texas while the Texas Panhandle and northwestern Kansas showed moisture improvement. Sep. Minneapolis wheat is up 9 1/2 cents, helped again by early commercial buying even though crop conditions are looking better for spring wheat with rain in the forecast for the northwestern U.S. Plains and western Canadian Prairies. Fundamentally speaking, there is still plenty of wheat in the world and this year's drought in the U.S. may not make much dent in those supplies, unless weather problems can also emerge elsewhere. Technically, the trends are currently higher for all three wheats. However, prices failed to sustain recent tests above resistance, which means sideways trends may soon be in store. DTN's National SRW index closed at $4.92 Wednesday, down from 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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