DTN Early Word Grains

6:00 a.m. CME Globex:

December corn was down 1 cent, November soybeans were down 3 1/2 cents, and September Kansas City (HRW) wheat was down 1/4 cent.

CME Globex Recap:

The world's stock markets are mostly lower, but Dow Jones futures are trading a little higher and commodities are mixed on early Thursday. Crude oil is roughly steady, staying near its highest prices in over three years with concerns about production trouble spots like Venezuela and Libya. Grains are not apt to find much bullish help from Thursday's weekly export sales report while traders anticipate two big USDA reports on Friday.

OUTSIDE MARKETS:

Previous closes on Wednesday showed the Dow Jones Industrial Average down 165.52 points to 24,117.59 and the S&P 500 down 23.43 points to 2,699.63 while the 10-year Treasury yield ended at 2.83%. Early Thursday, DJIA futures were up 74 points. Asian markets were lower with Japan's Nikkei 225 down 1.38 points (-0.01%) and China's Shanghai Composite down 26.28 (-0.9%). European markets were lower with London's FTSE 100 down 21.46 points (-0.3%), Germany's DAX down 93.72 points (-0.8%), and France's CAC 40 down 19.76 points (-0.4%). The euro was up 0.0007 and the U.S. dollar index was down 0.03 at 95.26. September 30-year T-Bonds were down 3/32nds while August gold was down $3.00 at $1,253.10 and August crude oil was up $0.11 at $72.87. Soybeans on China's Dalian Exchange were roughly steady and Malaysian palm oil futures were up 1.1%.

	BULL		BEAR
1)	December corn continues to hold above last Tuesday's low, ahead of Friday's USDA reports.	1)	Flooding reports aside, Monday's U.S. crop ratings stayed high for row crops and spring wheat.
2)	Even if the odds seem slim, a surprise of adverse weather this summer or unexpected trade agreement would put shorts on their heels.	2)	In spite of a recent $1.50 drop in Nov. soybean prices, commercials show no sign of increased buying yet.
3)	So far, September Chicago wheat is holding above its three-month low.	3)	The trends remain lower for all three wheats with limited weather threats so far in 2018.

MORE COMMODITY-SPECIFIC COMMENTS

CORN December corn is down 1 cent early with Thursday's drier weather map giving flooded areas a temporary break, but not for long with heavy amounts expected over Iowa, Minnesota, Wisconsin, and North Dakota the next seven days. Temperatures in the 90s will reach most of the western Plains Thursday and spread eastward into the Corn Belt on Friday and Saturday. The extended forecast expects above normal temperatures over the central U.S., just as corn begins pollinating. On the demand side, Thursday's export sales report has low expectations as USDA has not had many sales announcements lately. With USDA's Acreage and Grain Stocks reports due out Friday morning, trading in corn may stay quiet on Thursday. Technically, the trend in corn is still down, but there remains plenty of weather uncertainty and USDA's outlook for lower world corn supplies in 2018-19, which should help prices find support.

SOYBEANS November soybeans are down 3 1/2 cents early with no bullish help expected from Thursday morning's export sales report. Soybean crops are still considered to be doing well, but as described above, flooding problems in the north-central and northwestern Corn Belt have more heavy rain amounts expected in the seven-day forecast. At the same time, hot temperatures into early July are no surprise, but could take the edge off high crop ratings, if they stay around a while. Good crop weather is part of the reason November soybeans are trading near their lowest prices in two years and concerns about strained trade relations with China and the 25% tariff that they plan to enact against U.S. soybeans on July 6 is the other. It is difficult, maybe impossible to predict how this political game will play out, but as long as uncertainty prevails, potential buyers are reluctant to look at soybeans. Friday's Acreage and Grain Stocks reports offer potential for increased volatility on Friday, but so far, the trend in soybeans remains clearly down.

WHEAT September K.C. wheat is down 1/4 cent, a quiet early start with prices staying near their lowest level in five months. Thursday's temperatures will post a lot of triple-digit figures between Texas and Kansas, which will be mostly helpful to harvest after the past week's rain delays. Mostly light rain amounts are expected in the seven-day forecast for SRW wheat areas, but quality concerns are likely to prevail after a wet June. Spring wheat crops have more rain expected the next seven days in the northwestern Plains and western Canadian Prairies so crop conditions should stay high. Friday's Acreage and Grain Stocks reports from USDA are not likely to have much price impact for wheat as traders are seeing no strong reason to believe that world wheat production will see a significant reduction in 2018. The trends in all three wheats remain down.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.25	$0.01	-$0.36	Sep	$0.002
Soybeans:	$8.08	$0.01	-$0.65	Aug	$0.005
SRW Wheat:	$4.58	$0.10	-$0.30	Sep	$0.040
HRW Wheat:	$4.59	$0.02	-$0.20	Sep	-$0.003
HRS Wheat:	$5.16	-$0.04	-$0.25	Sep	$0.002

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

Todd can be followed throughout the day on Twitter @ToddHultman1

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