DTN Closing Grain Comments

General Comments:

Corn was up 1/2 cent in the July contract and up 1/4 cent in the December. Soybeans were 1/2 cent in the July contract and down 1/2 cent in the November. Wheat closed up 9 3/4 cents in the September Chicago contract, up 6 3/4 cents in the September Kansas City and up 2 3/4 cents in the September Minneapolis contract.

The September U.S. dollar index is down 0.01 at 94.72. August gold is down $6.00 at $1,272.60 while July silver is down 2 cents and July copper is down $0.0055. The Dow Jones Industrial Average is up 4 points at 24,704. August crude oil is up $1.04 at $65.94. August heating oil is down $0.0083, while August RBOB gasoline is down $0.0134 and August natural gas is up $0.059.

Corn:

July corn closed up a half-cent at $3.54 1/4 Wednesday, unable to hold on to early gains after surviving Tuesday's selling panic with a small loss. Here on the 20th of June, most market factors continue to look bearish for corn with beneficial rains covering the bulk of the Corn Belt and protecting crops from occasional surges into the 90s. Local flooding has also been seen this month, but rarely outweighs the benefits of broad coverage in traders' minds. With crop ratings high, it is easy to envision another big harvest, but there is still time for weather risk ahead. Noncommercial traders hanging on to their largest net long position since June 2016 is another bearish risk weighing on corn prices, and the bullishness is likely related to USDA's lower estimate of world ending corn stocks in 2018-19. The estimate is still early for 2018-19, but should at least give December corn prices a reason to find support somewhere near Tuesday's low of $3.60. On the demand side, ethanol remains a source of consistent support for corn prices. The U.S. Energy Department said last week's production increased slightly to 1.064 million barrels per day while ethanol inventory dropped from 22.2 to 21.6 million barrels. Technically, the trend remains down for corn with the December contract probing for support while the new crops are doing well, so far. DTN's National Corn Index closed at $3.24 Tuesday, its lowest price in four months and 29 cents below the July contract. In outside markets, the U.S. dollar index is quiet, but staying near its highest prices in over four years while August crude oil is up $1.04 after the U.S. Energy Department said crude oil supplies were down 5.9 million barrels last week.

Soybeans:

July soybeans closed up a half-cent at $8.89 1/2 Wednesday, still under pressure from favorable U.S. weather and an escalating trade war with China. Not much has changed since China promised to retaliate against the latest $200 billion of U.S. tariffs and investors are likely still wary, but weren't as panicked on Wednesday. The big problem is trying to understand the short-term and long-term ramifications of having an openly hostile dispute with the world's largest soybean buyer. As contentious as things currently are, China is still likely to need U.S. soybeans this fall after Brazil's exports taper off -- a point that brings us back to weather, which is currently favorable in the U.S. The five-day forecast expects a broad coverage of rain, which will contribute to local flooding in some areas, but is generally beneficial and helps drier areas like northern Missouri. Technically, the trend remains down for soybeans with the July contract near its lowest spot prices in over two years. The November contract, at $9.10 1/2 is near its 2017 low of $9.07. DTN's National Soybean Index closed at $8.27 Tuesday, priced 62 cents below the July contract and below its 2017 low of $8.40.

Wheat:

September Chicago wheat closed up 9 3/4 cents at $4.99 1/4, the largest percentage gain among grains on Wednesday. Wednesday's buying was unusual in that it came one day after prices broke below their May low and was supported by commercial buying. The winter wheat harvest in southern Nebraska and Kansas may have to wait a few days after locally heavy rains came through overnight, but otherwise all wheat crops look pretty good outside of the drought in the southwestern Plains. The five-day forecast has moderate showers expected in the northwestern Plains, but will miss North Dakota where dry conditions are more of a concern. Outside of North America, southern Russia has a chance for showers later this week and parts of Australia are dry, but USDA's latest outlook for world wheat production is only down about 2% from a year ago -- not enough to significantly dent supplies. Technically, the trends for all three wheats are down as we near the time of year when wheat prices typically turn lower. DTN's National SRW index closed at $4.56 Tuesday, down from its highest price in t10 months and 22 cents below the July contract. DTN's National HRW index closed at $4.81, 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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