DTN Closing Grain Comments

General Comments:

Corn was down 5 1/4 cents in the July contract and down 5 1/2 cents in the December. Soybeans were up 3 cents in the July contract and up 1 cent in the November. Wheat closed down 9 1/2 cents in the July Chicago contract, down 20 1/4 cents in the July Kansas City, and down 7 cents in the July Minneapolis contract. The September U.S. dollar index is unchanged at 94.45. August gold is up $3.50 at $1,282.00 while July silver is up 3 cents and July copper is down $0.0180. The Dow Jones Industrial Average is down 135 points at 24,955. August crude oil is up $0.86 at $65.71. August heating oil is up $0.0448 while August RBOB gasoline is up $0.0334 and August natural gas is down $0.060.

Corn:

July corn closed down 5 1/4 cents at $3.56 Monday, another new contract low, while noncommercial traders drag their feet getting out of heavy long positions. Friday's CFTC data showed noncommercials still bullish in corn, holding 286,650 contracts as of June 12. It may just be that some are committed to hanging on through the summer, expecting USDA's lower estimate of ending world corn stocks to eventually bail them out. So far, that has been an expensive decision and it is fair to wonder what it will take for noncommercials to liquidate down. The weekend saw scattered showers across the Northern Plains and some cases of flooding in southern Minnesota and Wisconsin. The five-day forecast expects more rain from Montana to Pennsylvania with heavy amounts in the Western Corn Belt and more moderate amounts in the Eastern Corn Belt. Monday's Crop Progress report is likely to keep row-crop ratings high and prices under pressure. On the demand side, USDA said 65.7 million bushels of corn were inspected for export last week, a neutral showing which brought the current season's total to 9% less than a year ago. Technically, the trends remain down for corn with the December contract posting a new low for 2018. DTN's National Corn Index closed at $3.31 Friday, its lowest price in four months and 30 cents below the July contract. In outside markets, the June U.S. dollar index is steady while other commodities are mixed.

Soybeans:

July soybeans ended up 3 cents at $9.08 1/2 Monday, holding a little higher in spite of Saturday's news that China responded to Friday's new tariffs from the U.S. with a $34 billion tariff list of their own, this time including a 25% penalty on U.S. soybean imports. While China's retaliatory move was expected, it still adds to bearish notions that relations with the world's largest buyer of soybeans are not getting better and the dispute may drag out for a long time. Aside from the trade dispute, soybeans have enough bearish concerns on their own. Brazil's record harvest is keeping China well supplied and it is possible that this year's good spring weather allowed for a larger planting than USDA estimated in March. Monday afternoon's Crop Progress report is likely to show another week of high crop ratings after the Midwest received a generous coverage of rain the past seven days. Monday morning, USDA said 30.1 million bushels of weekly soybean inspections improved the 2017-18 total to 7% less than a year ago, getting closer to USDA's estimated export pace. Another less bearish factor came from Friday's CFTC data, which showed noncommercials holding a lighter position of 91,656 net longs as of June 12. Technically, the trend remains down for soybeans with the July contract near the 2017 low of $9.00 for spot prices. DTN's National Soybean Index closed at $8.43 Friday, priced 63 cents below the July contract and close to its 2017 low of $8.40.

Wheat:

July Chicago wheat closed down 9 1/2 cents and July K.C. wheat was down 20 1/4 cents at $4.99 1/2 Monday, challenging support at the May low of $5.02 1/2 while winter wheat struggles to find new reasons to motivate buyers. Here in the U.S., winter wheat is being harvested and the spring wheat crop is likely to keep its high crop rating in Monday afternoon's Crop Progress report. The five-day forecast has more rain expected in the western Plains, from eastern Texas and Oklahoma to South Dakota. Outside of North America, southern Russia remains the only significant concern of yield loss due to dry weather. Friday's CFTC data showed noncommercials still bullish in Chicago wheat, holding 49,716 net longs as of June 12, the day wheat prices closed higher after USDA's WASDE report. Technically, Monday's lower close turned the trend lower for K.C. wheat, while Chicago wheat remains slightly above support at $4.86 1/4. The seasonal high for winter wheat prices typically arrives around early July, making this a dangerous time for wheat. DTN's National SRW Index closed at $4.77 Friday, down from its highest price in ten months and 23 cents below the July contract. DTN's National HRW Index closed at $5.10, 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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