DTN Before The Bell Grain Comments

Morning CME Globex Update:

July Chicago wheat was up 6 1/2 cents early Wednesday after DTN reported dry conditions are an increasing concern in Ukraine and southern Russia. Row crops were slightly higher after China countered last week's tariff announcement with their own proposal to buy more U.S. goods.

Other Markets:

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

Corn:

July corn was up a quarter-cent early Wednesday with another day of hot temperatures coming out of the southwestern Plains, as far north as Nebraska and Iowa while the northern and eastern Corn Belt stays in the 70s and 80s. Rain is falling along the Minnesota-Wisconsin border early Wednesday with a broad coverage of light to moderate rains expected around the Corn Belt the next seven days. In Brazil, Wednesday's satellite map and the seven-day forecast are both mostly dry, stressful to their second crop of corn. Hot and dry conditions in northern China are also an early concern. Fundamentally, there is plenty of uncertainty about the year ahead, but so far, crop conditions in the U.S. are favorable, an early source of bearish pressure on prices. Technically, Monday's lower closes turned the trends down for both, old-crop and new-crop corn, putting additional pressure on noncommercial longs to liquidate. DTN's National Corn Index closed at $3.52 Tuesday, down sharply 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 0.25 and other commodities are mostly higher, except for energies.

Soybeans:

July soybeans were up a quarter-cent early, continuing to find support above the May low of $9.92 1/2 while the U.S. and China continue back and forth haggling. Late Tuesday, the Wall Street Journal reported China offered to buy $70 billion of U.S. goods, including agricultural products like soybeans, if the White House would drop last week's new tariffs. Meanwhile, the next round of soybean crops are off to a good start here in the U.S. and the seven-day forecast is favorable with a broad coverage of light to moderate rain expected throughout the Midwest, heavier amounts in Iowa. Fundamentally, soybean supplies are tighter outside the U.S. while old-crop soybeans here in the U.S. are lacking demand. So far, the sideways trend in both, old-crop and new-crop soybeans are holding firm with new-crop spreads still showing small bullish inverses. DTN's National Soybean Index closed at $9.36 Tuesday, priced 65 cents below the July contract and staying well below major resistance at $10.00.

Wheat:

July Chicago wheat was up 6 1/2 cents and July K.C. wheat was up 7 1/4 cents early, holding in check in the middle of their trading ranges from May while traders continue to assess the prospects for world wheat production in early 2018. According to DTN's Ag Weather Brief, dryness is an increasing concern in Ukraine and southern Russia with warm temperatures expected the next ten days. Here in the U.S., hot temperatures continue to keep crops stressed in the southwestern Plains, but beneficial rains are expected to help spring wheat crops in the northwestern Plains and in Canada the next seven days. Technically, the trends are still higher for all three wheats, but the charts are not looking so bullish after prices failed to sustain recent tests above resistance. Sideways trends seem more likely until more is known about this year's wheat crops. DTN's National SRW index closed at $4.85 Tuesday, down from its highest price in ten months and 25 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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