DTN Closing Grain Comments

General Comments:

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

The September U.S. dollar index is up 0.56 at 94.91. August gold is down $3.70 at $1,256.20 while July silver is down 11 cents and July copper is down $0.0125. The Dow Jones Industrial Average is down 40 points at 24,243. August crude oil is up $2.20 at $72.73. August heating oil is up $0.0485, while August RBOB gasoline is up $0.0571 and August natural gas is up 0.055.

Corn:

December corn stayed at $3.73 1/4 with rain on Wednesday's map limited to southwestern South Dakota and the eastern edge of the Corn Belt. As we approach theFourth of July holiday next week, the weather pattern appears to be transitioning from frequent rains to a generally drier forecast with hotter temperatures. However, in the north-central Corn Belt, where flooding has become a problem, relief in not in sight yet as more moderate to locally heavy amounts are expected the next seven days. On the demand side, ethanol production remains a supportive force for corn prices in spite of concerns about EPA's refinery waivers. The Department of Energy said Wednesday that ethanol production increased slightly to 1.072 million barrels a day last week, while inventory also increased slightly, to 21.7 million barrels. With December corn prices down over 50 cents from the high in May, we would normally expect to see commercial buying interest for these cheaper prices. So far, however, there is no sign of that, either in CFTC positions or in futures spreads. Friday's Acreage and Grain Stocks reports have a combined history of moving markets, but corn seems more predictable than usual this year as spring weather was favorable for planting before June 1. With noncommercials still heavily net long, the trend remains down for corn and last Tuesday's low is holding short-term support. DTN's National Corn Index closed at $3.25 Tuesday, near its lowest price in five months and 28 cents below the July contract. In outside markets, the September U.S. dollar index is up 0.56 after U.S. Treasury Secretary Mnuchin told CNBC that he expects a big gain in second-quarter GDP. Thursday morning's U.S. GDP report is for the first quarter.

Soybeans:

November soybeans ended up 1 1/2 cents at $8.89 Wednesday, showing caution ahead of Friday's Acreage and Grain Stocks reports from USDA. Dow Jones' survey expects USDA to increase its estimate of soybean plantings from 89.0 million acres in March to 89.8 million acres on Friday and it could even be a little higher as planting weather was mostly favorable before recent rains turned excessive in north-central crop areas. USDA's estimate of June 1 soybean stocks is also expected to be a bearish 1.218 billion bushels, up from 966 million bushels a year ago. The bearish expectation comes from last year's record U.S. soybean harvest plus Brazil's record harvest while trade relations with China remain strained. USDA's late June report is notorious for surprises and big price reactions and that could be true again this year. On the other hand, we can't forget about the difficulty this market has attracting buyers with China about to enact a 25% tariff on U.S. soybeans on July 6. Technically, the trend remains down for soybeans with the Nov/Mar futures spread showing no sign yet of commercial buying interest near the lowest November prices in over two years. DTN's National Soybean Index closed at $8.07 Tuesday, at its lowest price in over two years and priced 60 cents below the July contract.

Wheat:

September Chicago wheat closed up 5 1/2 cents Tuesday and September K.C. wheat was up 2 3/4 cents at $$4.78 1/4, a modest bounce after posting a new five-month low on Tuesday. The U.S. weather map is drier Wednesday with scattered showers in the eastern Midwest and triple-digit temperatures expected in the southwestern U.S. Plains. The intense heat will help winter wheat harvest resume after a week of moderate to heavy rain in the western Plains. The seven-day forecast expects lighter amounts for SRW wheat areas, but wet weather has increased quality concerns, which showed up Wednesday as commercial buying in Chicago wheat, ahead of the July contract's first notice day on Friday. Moderate to heavy rain is also expected in North Dakota and the western Canadian Prairies, likely to keep spring wheat conditions favorable. Dryness remains a concern in southern Russia, but with plenty of wheat expected at the end of 2018-19, the trends for all three wheat futures remain down. DTN's National SRW index closed at $4.49 Tuesday, at its lowest price in two months and 21 cents below the July contract. DTN's National HRW index closed at $4.56, also at its lowest price in two months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BE)

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