DTN Early Word Grains
Wheat Leads Grain Prices Higher
December corn was unchanged, November soybeans were up 2 cents, and September Kansas City (HRW) wheat was up 11 3/4 cents.
CME Globex Recap:Global markets are broadly lower again early Monday after President Trump talked about imposing auto tariffs over the weekend and said a NAFTA agreement is not likely before this year's fall elections. Most outside commodities are also trading lower, except for grain prices, led by a double-digit gain in K.C. wheat.
OUTSIDE MARKETS:Previous closes on Friday showed the Dow Jones Industrial Average up 55.36 points at 24,271.41 and the S&P 500 up 2.06 points at 2,718.37 while the 10-year Treasury yield ended at 2.85%. Early Monday, DJIA futures were down 150 points. Asian markets were lower with Japan's Nikkei 225 down 492.58 points (-2.2%) and China's Shanghai Composite down 71.86 (-2.5%). European markets were also lower with London's FTSE 100 down 72.44 points (-0.9%), Germany's DAX down 68.83 points (-0.6%), and France's CAC 40 down 56.18 points (-1.0%). The euro was down 0.0033 and the U.S. dollar index was up 0.37 at 94.84. September 30-year T-Bonds were up 11/32nds while August gold was down $4.90 at $1,249.60 and August crude oil was down $0.38 at $73.77. Soybeans on China's Dalian Exchange were trading higher and Malaysian palm oil futures were up 0.3%.
| BULL | BEAR | ||
| 1) | Above normal nightly temperatures are a threat to corn yields during pollination. | 1) | Flooding reports aside, USDA's ratings for row crops and spring wheat will likely maintain high trajectories on Monday afternoon. |
| 2) | Commercials turned net long in soybeans as of June 26, a recognition of value at these lower prices. | 2) | So far, no sign of China backing away from Friday's plans for a 25% tariff on U.S. soybeans. |
| 3) | Even if the odds seem slim, a surprise of adverse weather this summer or unexpected trade agreement would put shorts on their heels. | 3) | The trends remain lower for all three wheats with limited international weather threats so far in 2018. |
CORN December corn is unchanged early Monday, not showing much reaction to this weekend's rains around Nebraska and Iowa or the latest seven-day forecast of moderate rain amounts in the northwestern U.S. Plains and eastern Midwest, while the central Corn Belt is drier. Much of the Corn Belt will see temperatures in the 90s this week with warm temperatures at night offering some concern for pollinating corn. Last week's report of June 1 corn stocks showed less-than-expected demand for corn in 2017-18 and that is a bearish concern for prices, especially while the new corn crop is off to a generally favorable start. Technically, the trend in corn is still down, but USDA's outlook for lower world corn supplies in 2018-19 should help prices find support.
SOYBEANS November soybeans are up 2 cents Monday, helped by early commercial buying in soybean meal, giving prices a modest lift. After a sharp drop in prices during June, U.S. soybeans are now facing a possible 25% tariff coming from China on Friday and so far, neither China or the U.S. appear to be backing down from further tariff threats. Friday's CFTC data offered some encouragement to soybean bulls, showing commercials now net long 28,998 contracts, a vote of confidence for these cheaper prices. Meanwhile, here in the U.S., this week's forecast looks generally drier with hotter temperatures. Monday afternoon's Crop Progress report however, is likely to show soybean crops in very good condition. With plenty of weather uncertainty still ahead and trade uncertainty with China, soybean prices still have plenty of potential for more volatility this summer, but so far, the trend in soybeans remains clearly down.
WHEAT September K.C. wheat is up 11 3/4 cents early Monday, boosted by a mix of commercial and noncommercial buying that is helping prices avoid their low for 2018. In the big picture, world wheat production looks like it will still be high in 2018, maybe down 2% or 3% from last year's record harvest. Locally however, commercial buying in Chicago wheat suggest demand is giving both Chicago and K.C. wheat prices some kind of short-term lift. The SRW wheat crop does have quality concerns this year, thanks to wet conditions at harvest and more rain is expected in the eastern Midwest this week. The spring wheat crop is apt to show another high crop rating on Monday afternoon. For wheat, the large factors remain bearish and the trends are down for all three, but there is enough uncertainty to still encourage two-way trading.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.24 | $0.05 | -$0.35 | Sep | $0.002 |
| Soybeans: | $8.00 | -$0.02 | -$0.64 | Aug | $0.008 |
| SRW Wheat: | $4.77 | $0.20 | -$0.24 | Sep | $0.020 |
| HRW Wheat: | $4.72 | $0.18 | -$0.17 | Sep | $0.015 |
| HRS Wheat: | $5.13 | $0.02 | -$0.23 | Sep | $0.025 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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