DTN Closing Grain Comments

General Comments:

Corn was up 3/4 cent in the July contract and up 1/4 cent in the December. Soybeans were down 8 1/2 cents in the July contract and down 8 1/2 cents in the November. Wheat closed up 14 1/2 cents in the September Chicago contract, up 19 1/4 cents in the September Kansas City, and up 12 1/4 cents in the September Minneapolis contract. The September U.S. dollar index is down 0.21 at 94.20. August gold is up $3.40 at $1,256.90 while September silver is up 1 cent and September copper is down $0.0885. The Dow Jones Industrial Average is up 111 points at 24,286. August crude oil is down $1.47 at $72.67. August heating oil is up $0.0150 while August RBOB gasoline is up $0.0092 and August natural gas is down 0.037.

Corn:

December corn closed up 1/4 cent at $3.64 1/2 Thursday, a day of quiet trading after the 4th of July holiday. Nebraska and Iowa received more rain overnight, which is not good news for producers already experiencing flooding problems. For the next ten days, there is not much rain expected across the Corn Belt while temperatures are expected to stay above normal, but probably won't be hot enough to cause much crop damage. Thursday's U.S. Drought Monitor showed drier conditions the past week in the Southern Plains while western North Dakota experienced moisture improvement. Generally speaking, corn crop conditions will likely keep their high ratings on Monday afternoon as pollination increases, but some acres are apt to be lost to this year's excess rain. On the demand side, USDA said an optional origin sale of 5.4 million bushels (137,000 mt) of corn was made to South Korea for 2018-2019. The pace of ethanol production also remains high with the Department of Energy reporting 1.067 million barrels a day for last week, still high enough to be supportive for corn prices. Ethanol inventory increased from 21.7 million to 22.0 million barrels. For now, the trend remains down for December corn while the June low of $3.60 is still a potential source of support. DTN's National Corn Index closed at $3.19 Tuesday, up from a new 2018 low and 33 cents below the September contract. There were 281 delivery intentions for July corn early Thursday. In outside markets, the September U.S. dollar index is down 0.21 after Federal Reserve minutes showed concerns about rising inflation and adverse effects of tariffs.

Soybeans:

November soybeans ended down another 8 1/2 cents at $8.55 3/4 Thursday as potential buyers continue to keep a distance ahead of Friday's deadline for new tariffs from the U.S. and then, China. China's new list happens to include a 25% tariff against U.S. soybeans and another penalty on pork. The bigger concern for soybeans is that no one knows where this escalating conflict is headed and what long-term consequences might emerge. On a more practical note, China is still likely to be a buyer of U.S. soybeans this fall, which means that weather will still play a big part in the prices Chinese importers ultimately pay. In spite of areas of flooding in the northwestern U.S. Plains and dry conditions around northern Missouri, soybean crops are earning high ratings from USDA and the seven-day forecast is mostly favorable. Technically, the trend remains down for soybeans with recent hints of possible support from commercial net longs. Due to this week's holiday, USDA will release its weekly report of export sales Friday morning. DTN's National Soybean Index closed at $7.87 Tuesday, at its lowest price in over nine years and priced 61 cents below the August contract. Among July contracts, delivery intentions totaled 468 for soybeans, 1,046 for soybean oil, and still none for meal early Thursday.

Wheat:

September Chicago wheat closed up 14 1/2 cents and September K.C. wheat was up 19 1/4 cents at $5.03 1/4 Thursday, getting support from more reports of wheat problems in Europe. On Tuesday, we saw wheat prices in France hit their highest levels in three years on dry weather concerns. On Thursday, AP News reported a smaller estimate of 41 mmt for Germany's wheat crop. USDA's next estimate of world wheat production will arrive on Thursday, July 12 and is likely to be down 3% from a year ago, lower than last month's 2% reduction. Thursday's higher winter wheat prices also come at a time when wheat is normally making its seasonal highs so unless more reduced estimates start rolling in, it is reasonable to treat this week's higher prices with suspicion. To the north, September Minneapolis wheat closed up 12 1/4 cents at $5.47 1/2 with a mostly dry seven-day forecast in store for the northwestern U.S. Plains and western Canadian Prairie. Eastern Oregon is also experiencing severe drought conditions. In spite of this week's higher prices, the trends for all three wheat futures remain down while weather risk still in play. DTN's National SRW Index closed at $4.65 Tuesday, up from its lowest price in two months and 26 cents below the September contract. DTN's National HRW Index closed at $4.61, up from its lowest price in two months. Delivery intentions for July contracts totaled 22 for K.C. wheat and none for either Chicago or Minneapolis wheat.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.