DTN Early Word Grains

6:00 a.m. CME Globex:

July corn was down 1 3/4 cents, July soybeans were down 1 3/4 cents, and July Kansas City (HRW) wheat was up 1/4 cent.

CME Globex Recap:

Financial markets are starting close to Friday's prices early Monday even though there will be a lot of news to follow this week. The weekend's G-7 meeting increased strain between the U.S. and its trading partners, President Trump will be meeting with North Korea's President Kim Jong-un in Singapore on Tuesday, and the Federal Reserve is expected to increase the federal funds rate again on Wednesday. Grains were off to a mixed start with a forecast that still looks mostly favorable for the Midwest.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 75.12 points higher at 25,316.51 and the S&P 500 was up 8.66 points to 2,779.03, while the 10-year Treasury yield ended at 2.94% Friday. Early Monday, DJIA futures were up 33 points. Asian markets were mixed with Japan's Nikkei 225 up 109.54 points (0.5%) and China's Shanghai Composite down 14.36 points (-0.5%). European markets were a little higher with London's FTSE 100 up 57.77 points (0.7%), Germany's DAX up 83.76 points (0.6%), and France's CAC 40 up 12.72 points (0.2%). The euro was up 0.0014 and the U.S. dollar index was up 0.11 to 93.65. June 30-year T-Bonds were down 14/32nds while August gold was down $3.60 to $1,299.10 and July crude oil was down $0.37 at $65.37. China's Dalian soybeans were steady to lower and Malaysian palm oil futures were down 0.4% overnight.

	BULL		BEAR
1)	It doesn't seem to matter to traders, but dry conditions remain concerns in Brazil and northern China.	1)	New four-month lows in corn and soybean futures as U.S. row crops are starting 2018 with favorable conditions.
2)	Bullish arguments for soybeans are difficult to find, but the seasonal high typically arrives in early July.	2)	Noncommercials are heavily net long in corn and soybeans as prices are falling.
3)	Winter wheat conditions are increasingly dry in Ukraine and southern Russia with not much rain in the forecast.	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 down 1 3/4 cents early Monday, possibly getting closer to support after two weeks of one-way selling. Monday morning's weather map shows rain from the Dakotas, through Iowa and eastward to Pennsylvania, helping keep crop conditions favorable in the U.S. The seven-day forecast shows moderate rains expected in the northern Plains, including Iowa and in the southeastern Corn Belt with some benefit to Illinois. Temperatures remain hot in the southwestern Plains, but are more moderate elsewhere. In Brazil, the second crop remains dry with a small area of moderate rain expected in southern Brazil and USDA will provide a new crop estimate in Tuesday's WASDE report. U.S. corn inspections have maintained a pace close to USDA's export estimate and are likely to keep that up later Monday morning. The trend in corn is currently down, but fundamentally, there is still uncertainty in the new growing season.

SOYBEANS July soybeans are down 1 3/4 cents early Monday, still showing some bearish pressure after a sharp two-week decline, but also offering bargain hunters a chance at prices near their lowest levels of 2018. As described for corn above, the seven-day forecast remains mostly favorable for row crops early in 2018, but there is still plenty of season ahead. Soybean inspections are apt to be light again later Monday morning and exports are at risk of not reaching USDA's estimate by the end of August. Tuesday's WASDE report is not expected to show much change in USDA's soybean estimates, but the export estimate may be trimmed lower. Last week's price break below the low in May was a bearish change in trend, but prices may be oversold short-term as there is still uncertainty about the U.S. crop season ahead.

WHEAT July K.C. wheat is up a quarter-cent early, but down from an earlier attempt to trade higher on Sunday evening. Both Chicago and K.C. contracts are holding within gradual uptrends, but are also staying below last month's test of ten-month highs that failed to sustain prices. Here in the U.S., it seems clear that winter wheat production will be down from a year ago due to drought, but analysts in Dow Jones' survey are only expecting a slight reduction in Tuesday's USDA estimate, to 1.187 billion bushels. All wheat production remains higher than a year ago, expected at 1.82 billion bushels, thanks to favorable early spring wheat conditions. Outside the U.S., conditions in Europe are mostly favorable, but there is still not much rain in the forecast for Ukraine and southern Russia. The trend in winter wheat remains gradually up with support for July K.C. wheat at the May low of $5.02 1/2.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.46	$0.01	-$0.32	Jul	-$0.001
Soybeans:	$9.04	-$0.05	-$0.65	Jul	$0.001
SRW Wheat:	$4.94	-$0.06	-$0.26	Jul	$0.007
HRW Wheat:	$5.18	$0.01	-$0.20	Jul	$0.075
HRS Wheat:	$5.78	-$0.05	-$0.15	Jul	$0.001

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

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