DTN Early Word Grains

6:00 a.m. CME Globex:

July corn was up 1 1/2 cents, July soybeans were up 1/4 cent, and July Kansas City (HRW) wheat was up 10 1/2 cents.

CME Globex Recap:

Nearly all commodities, including grains, are trading higher early Thursday as investors are apparently starting the day with a "risk-on" point of view. Row crops are a little higher and winter wheat is starting with double-digit gains, prompted by this week's concerns of dry crop conditions in Ukraine and southern Russia. The U.S. dollar index is down 0.31 after real GDP in the Euro zone was up 2.5% in the first quarter from a year ago, as expected reported RTTNews.com.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 346.41 points higher at 25,146.39, the NASDAQ Composite gained 51.38 points to 7,689.24, the S&P 500 added 23.55 points to 2,772.35, and the 10-year Treasury yield closed at 2.97% Wednesday. Early Thursday, DJIA futures were 45 points higher. Asian markets were mixed with Japan's Nikkei 225 up 197.53 points (0.9%) and China's Shanghai Composite down 5.68 points (-.2%). European markets were mostly higher with London's FTSE 100 down 4.78 points (-0.1%), Germany's DAX up 34.18 points (0.3%), and France's CAC 40 up 25.50 points (0.5%). The euro was 0.0055 higher and the U.S. dollar index was down 0.31 to 93.30. June 30-year T-Bonds were 10/32 lower while August gold was up $1.20 to $1,302.60 and crude oil was up $0.17 at $64.90. China's Dalian soybeans were lower and Malaysian palm oil futures were down 0.1% overnight.

	BULL		BEAR
1)	Brazil's second corn crop remains dry and dryness is a concern early in northern China.	1)	U.S. row crops are starting 2018 with favorable conditions and there is rain in the seven-day forecast.
2)	The seasonal high for soybeans typically comes around early July.	2)	Because weather problems have been minimal this spring, both corn and soybean acres may be higher than USDA estimated in March.
3)	Winter wheat contracts got a bounce from fresh concerns of increasingly dry conditions in Ukraine and southern Russia.	3)	Spring wheat conditions are favorable early with rain expected in the northwestern Plains and western Canadian Prairies.

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MORE COMMODITY-SPECIFIC COMMENTS

CORN July corn is trading up 1 1/2 cents Thursday, finding early support after falling to a new three-month low on Wednesday. Thursday's weather map shows rain falling from South Dakota to Kansas, helping some of the drier areas of the western Plains. Early favorable growing conditions here in the U.S. have been the main source of recent selling in corn, exacerbated by heavy noncommercial long positions that have been under pressure to liquidate. However, the seven-day forecast remains mostly dry for Brazil, except for moderate rains expected in Parana. The North China Plain is also in need of rain and has become a recent concern for corn crops. USDA's weekly report of export sales will be watched at 7:30 a.m. and will likely have supportive numbers for corn prices.

SOYBEANS July soybeans are up 1/4 cent early Thursday, staying above the May low of $9.92 1/2 so far, but not having much of a bullish argument to convince us that prices will be able to stay above that critical support. As with corn, early conditions for soybean crops are favorable in the U.S. with moderate rains expected to help improve subsoil moisture across the Midwest this week. On the demand side, FOB soybean prices are 8 cents cheaper in New Orleans than at Brazil and moving old-crop soybeans has been more difficult in 2018 while the U.S. and China haggle trade terms. Thursday's weekly export sales report is likely to be bearish again for old-crop soybeans while China takes advantage of Brazil's record harvest in 2018. While old-crop soybeans remain under bearish pressure, new-crop prices have done a better job of holding firm in their sideways range. However, the Nov/Mar spread has lost its bullish inverse -- a sign of easing of commercial demand.

WHEAT July K.C. wheat is up 10 1/2 cents early, establishing hope for a third consecutive day higher as this week's concerns of increasingly dry conditions for winter wheat crops in Ukraine and southern Russia are adding a new bullish factor for traders to consider. It is still too early to know how serious these concerns might become, but this is the kind of news that causes the short side of the market to step back and allow for more price volatility. Here in the U.S., winter wheat problems with drought in the southwestern Plains are well-known and temperatures are expected to stay hot in the region. Spring wheat crops however, are off to a good start with beneficial rains in the seven-day forecast for the northwestern U.S. Plains and western Canadian Prairies.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.46	-$0.05	-$0.32	Jul	$0.002
Soybeans:	$9.29	-$0.07	-$0.66	Jul	-$0.003
SRW Wheat:	$4.93	$0.08	-$0.27	Jul	-$0.014
HRW Wheat:	$5.10	$0.11	-$0.30	Jul	-$0.002
HRS Wheat:	$5.84	$0.01	-$0.14	Jul	-$0.004

Todd Hultmancan be reached at todd.hultman@dtn.com

Toddcan be followed throughout the day on Twitter @ToddHultman1

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