DTN Early Word Grains

6:00 a.m. CME Globex:

December corn was up 4 cents, November soybeans were up 3/4 cent, and September Kansas City (HRW) wheat was up 11 1/2 cents.

CME Globex Recap:

After a day of broad, risk-off selling on Monday, investors are trying to act normal again with mostly higher trading in major stock markets and commodities. Winter wheat prices are a little flighty, trying a higher start again after Monday's sell-off. Except for Minneapolis wheat, U.S. grain futures close at12:05 p.m.CDT on Tuesday.

OUTSIDE MARKETS:

Previous closes on Monday showed the Dow Jones Industrial Average up 35.77 points at 24,307.18 and the S&P 500 up 8.34 points at 2,726.71 while the 10-year Treasury yield ended at 2.87%. Early Tuesday, DJIA futures were up 104 points. Asian markets were mixed with Japan's Nikkei 225 down 26.39 points (-0.1%) and China's Shanghai Composite up 11.33 (0.4%). European markets were higher with London's FTSE 100 up 27.01 points (0.3%), Germany's DAX up 122.07 points (1.0%), and France's CAC 40 up 45.51 points (0.9%). The euro was up 0.0051 and the U.S. dollar index was down 0.24 at 94.63. September 30-year T-Bonds were down 6/32nds while August gold was up $5.40 at $1,247.10 and August crude oil was up $0.82 at $74.76. Soybeans on China's Dalian Exchange were steady to lower and Malaysian palm oil futures were down 0.8%.

	BULL		BEAR
1)	Above normal nightly temperatures are a threat to corn yields during pollination.	1)	USDA's good-to-excellent crop ratings still high for row crops and spring wheat.
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)	Rising wheat prices in France suggest all weather concerns may not yet be accounted for.	3)	Downtrends remain in effect for corn, soybeans, and all three wheats with potential buyers scarce.

MORE COMMODITY-SPECIFIC COMMENTS

CORN December corn is up 4 cents early Tuesday, trimming back some of Monday's loss after USDA's good-to-excellent rating for corn eased a point, from 77% to 76%. That is still a high rating for this time of year and compares closely to crops in 2014 and 2016. The highest poor-to-very poor ratings aren't coming from the flooded areas of the northwestern Corn Belt, but from the hot and dry areas of the southwestern Plains. Speaking of which, the western Plains will be hot again Tuesday with the 90s reaching into South Dakota while the rest of the Corn Belt sees more moderate temperatures with moderate rain amounts east and south of Illinois. Technically, the trend in corn is still down and noncommercial net longs remain a bearish concern. However, USDA's outlook for lower world corn supplies in 2018-19 should help prices find support above last year's lows.

SOYBEANSNovember soybeans are up 3/4 cent Tuesday, staying close to their lowest prices in two years while China is expected to enact a 25% tariff against U.S. soybeans on Friday that will prompt another response of higher tariffs from the U.S., which will... well, you get the picture. Nobody really knows for sure where all this back and forth trading of tariffs is headed, but we do know that investors continue to react negatively to news of increased tariffs and that is one component not helping grain and oilseed prices. The other bearish influence has come from weather and USDA dropped its good-to-excellent rating for soybeans late Monday, from 73% to 71%, which is still the highest since 2014. Missouri's poor-to-very poor rating of 15% is soybeans' biggest problem as most other states are doing well overall. With plenty of weather uncertainty still ahead and some anxiety possibly building ahead of Friday's tariff deadline, soybean prices still have potential for more volatility this summer, but so far, the trend in soybeans remains clearly down.

WHEAT September K.C. wheat is up 11 1/2 cents early Tuesday, similar to what we saw 24 hours ago before wheat turned south and closed down nearly 18 cents on the day. That kind of squirrely indecision is a little difficult to understand as wheat's big fundamental picture has remained mostly bearish in 2018. However, we do have to acknowledge that wheat prices in France have been rising so it is possible that all the weather problems are not yet accounted for. Here in the U.S., USDA said 51% of U.S. winter wheat has been harvested, on its usual pace with the Kansas harvest 71% complete. The spring wheat crop continues to do well with 77% rated good-to-excellent, the highest since 2010. For wheat, the large fundamental factors remain bearish with some weather risk still in play. 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:	$3.13	-$0.11	-$0.34	Sep	$0.013
Soybeans:	$7.91	-$0.08	-$0.62	Aug	$0.015
SRW Wheat:	$4.55	-$0.22	-$0.26	Sep	-$0.011
HRW Wheat:	$4.50	-$0.22	-$0.21	Sep	-$0.043
HRS Wheat:	$5.04	-$0.10	-$0.23	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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