DTN Closing Grain Comments

General Comments:

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

The June U.S. dollar index is up 0.16 at 93.53. August gold is up $0.20 at $1,303.20, while July silver is down 4 cents and July copper is up 0.0165. The Dow Jones Industrial Average is up 37 points at 25,278. July crude oil is down $0.18 at $65.77. July heating oil is down $0.0074, while July RBOB gasoline is up $0.0065 and July natural gas is down $0.039.

For the week:

July corn closed down 13 3/4 cents and December was down 13 3/4 cents. July soybeans were down 52 cents, while the November was down 48 cents. July Chicago wheat was down 3 1/4 cents, July Kansas City wheat was down 2 1/2 cents, and July Minneapolis wheat was down 11 1/2 cents.

Corn:

July corn gained 1 1/2 cents Friday to $3.77 3/4, but was down 13 3/4 cents on the week, a second week of sharp losses that left prices near their lowest level in four months. Four months of rising prices in early 2018 was supported by Argentina's drought and then, dry weather in Brazil. In late May, however, corn made a sharp U-turn lower as U.S. crop conditions are looking good early. Never mind that subsoil moisture in the Midwest is lower this year or that Brazil and northern China are both currently dry -- those concerns will have to wait. The past two weeks of selling caught noncommercials off-guard with their heaviest net long position since 2001 and Friday afternoon's CFTC data will be interesting to see how much liquidation has occurred as of Tuesday. Fundamentally, the outlook for corn prices leans bearish while the seven-day forecast remains favorable. Technically, the trends in corn are down. DTN's National Corn Index closed at $3.44 Thursday, down from its high of $3.75 in May. In outside markets, the June U.S. dollar index is up 0.16 as G-7 leaders discuss trade in Quebec and the Fed gets ready for a rate decision next week.

Soybeans:

July soybeans closed down a nickel Friday at $9.69 1/4 and were down 52 cents on the week, their lowest close in nine months. Similar to corn, a good early start for soybean crop conditions in 2018 plus a large net long position among noncommercials proved a bearish combination for soybean prices the past two weeks. If that were not enough, Brazil's record harvest in early 2018 is allowing China to avoid the U.S. this summer, resulting in 9% fewer soybean shipments in 2017-18. Rain fell Friday from South Dakota to northern Illinois and heavier amounts are expected from Iowa to Ohio the next seven days, more moderate amounts in the northern Plains. So far, most of the Midwest has not seen the hotter temperatures experienced in the southwestern Plains and that is also helping row crops. Fundamentally, the price outlook for soybeans remains bearish while the weather is favorable, and there is a chance USDA will increase its estimate of U.S. ending soybean stocks in Tuesday's WASDE report. Technically, the trend in soybeans is down for both, old-crop and new-crop contracts and the Nov/Mar spread has lost its bullish inverse. DTN's National Soybean Index closed at $9.09 Thursday, priced 65 cents below the July contract and far below major resistance at $10.00.

Wheat:

July Chicago wheat closed down 6 3/4 cents and July K.C. wheat was down 6 1/4 cents at $5.38 1/4 Friday, succumbing to profit-taking at the end of the week and also gave back the week's earlier gains, even after hearing that winter wheat crops need rain in Ukraine and southern Russia. Friday's lower close extinguished this week's bullish hopes and are not an encouraging sign for wheat prices moving forward, unless the weather comes up with other bullish concerns. Here in the U.S., drought in the southwestern Plains is well known and USDA will provide its next estimate of the U.S. wheat crop in Tuesday's WASDE report. Spring wheat prices also lost ground this week, pressured by beneficial rains in the forecast for the northwestern Plains and western Canadian Prairie. Technically, the trends are higher for winter wheat, but a more sideways path is likely after prices failed to sustain recent tests above resistance. Spring wheat has a sideways trend and is challenging support. DTN's National SRW index closed at $5.00 Thursday, 27 cents below the July contract and staying below the 2017 high of $5.28. DTN's National HRW index closed at $5.17 Thursday, near its highest price in three years.

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

Follow Todd Hultman on Twitter @ToddHultman1

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