DTN Closing Grain Comments

General Comments:

Corn was down 10 3/4 cents in the July contract and down 10 1/2 cents in the December. Soybeans were down 19 1/2 cents in the July contract and down 18 1/4 cents in the November. Wheat closed down 18 cents in the July Chicago contract, down 19 1/4 cents in the July Kansas City, and down 10 3/4 cents in the July Minneapolis contract.

The June U.S. dollar index is down 0.14 at 94.02. August gold is down $2.50 at $1,296.80 while July silver is down 1 cent and July copper is up $0.0400. The Dow Jones Industrial Average is up 163 points at 24,798. July crude oil is down $1.08 at $64.73. July heating oil is down $0.0243, while July RBOB gasoline is down $0.0222 and July natural gas is down $0.029.

Corn:

July corn followed last week's 14 1/2 cents drop with a decline of 10 3/4 cents on Monday, ending at $3.80 3/4, its lowest close in over three months. Whatever bullish concerns were coming from Brazil's dry weather are now outvoted by early favorable crop conditions in the U.S. Last Monday's 79% good-to-excellent rating from USDA will get another update later Monday afternoon and is looking at a seven-day forecast of moderate to locally heavy rain across much of the Midwest. A troubling concern at this time of falling prices is Friday's CFTC report showing noncommercials holding 392,609 net longs as of May 29, nearly their largest bullish position since 2011, which has now become a source of liquidation in the market. Monday morning, USDA said 61.2 million bushels of corn were inspected for export last week, bringing total inspections to down 11% in 2017-18 from a year ago. Fundamentally, there is still plenty of weather uncertainty in the season ahead. Technically, Monday's lower closes turned the trends down for both, old-crop and new-crop corn. DTN's National Corn Index closed at $3.59 Friday, down from its highest price in 23 months and 32 cents below the July contract. In outside markets, the June U.S. dollar index is down 0.14, but nearly all commodities traded lower, seeing a risk-off response from investors that is possibly related to U.S. trade concerns.

Soybeans:

July soybeans fell 19 1/2 cents to $10.01 3/4 Monday, near its lowest prices in three months while nothing is happening to inspire potential buyers. Demand for old-crop soybeans remains a bearish concern, while China and the U.S. were unable to report any significant progress from the weekend's trade talks. USDA said 20.5 million bushels of soybeans were inspected for export last week, a neutral showing, which put total inspections down 8% in 2017-18 from a year ago with three months left in the season. Later Monday afternoon, USDA is expected to give soybeans a high initial crop rating and rain in this week's forecast for much of the Midwest is also putting bearish pressure on prices at a time when speculators are long. Friday's CFTC data showed noncommercials increased net longs in soybeans from 143,470 to 150,233 as of May 29. Fundamentally, the early outlook for soybean prices is bearish, while the weather is cooperative. Technically, the sideways trend in Nov soybeans is holding firm, but new-crop spreads show a weakening of bullish inverses. The trend in July soybeans is also sideways, but prices are sagging lower as demand for old-crop soybeans remains a bearish concern. DTN's National Soybean Index closed at $9.56 Friday, priced 66 cents below the July contract and staying below major resistance at $10.00.

Wheat:

July Chicago wheat closed down 18 cents and July K.C. wheat was down 19 1/4 cents at $5.21 1/2 Monday, unwinding the choppy uptrend that has been taking place since mid-December and took prices to a new 10-month high just last week. While drought in the southwestern Plains will hurt winter wheat production here in the U.S., there has not been much concern yet about problems in other parts of the world to help feed wheat's uptrend. Australia remains dry in the south and west and there is some concern around the Black Sea, but other regions seem to be doing well, overall. Friday's CFTC data showed noncommercials in Chicago wheat increased net longs from 41,849 to 45,129 as of May 29. It is unusual for speculators to be net long in Chicago wheat and their track record for being bullish has been poor. Fundamentally, world wheat stocks are expected to show a modest decline in 2018-19, but supplies will still likely be ample. Technically, the trends remain up for all three wheats, but more sideways paths are likely after prices failed to sustain recent tests above resistance. DTN's National SRW index closed at $4.96 Friday, down from its highest price in 10 months and 27 cents below the July contract. DTN's National HRW index closed at $5.09, down from its highest price in over two years.

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

Follow Todd Hultman on Twitter @ToddHultman1

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