DTN Early Word Grains
Row Crops Show Stress, Start Higher Tuesday
December corn was up 3 1/4 cents, November soybeans were up 4 cents, and September Kansas City (HRW) wheat was up 6 1/4 cents.
CME Globex Recap:Outside stock markets are mixed to a little higher, Treasury yields are unchanged and the U.S. dollar index is quiet. Most commodities are higher early Tuesday, including grains after USDA showed a small reduction in crop conditions for row crops.
OUTSIDE MARKETS:Previous closes on Monday showed the Dow Jones Industrial Average up 44.95 points at 25,064.36 and the S&P 500 down 2.88 points at 2,798.43 while the 10-year Treasury yield ended at 2.86%. Early Tuesday, DJIA futures were down 22 points. Asian markets are mixed with Japan's Nikkei 225 up 100.01 (0.4%) and China's Shanghai Composite down 15.92 (-0.6%). European markets are a little higher with London's FTSE 100 up 8.72 points (0.1%), Germany's DAX up 9.38 points (0.1%), and France's CAC 40 up 2.77 points (0.1%). The euro was up .0016 and the U.S. dollar index was up 0.13 at 94.15. September 30-year T-Bonds were down 2/32nds while August gold was up $3.50 at $1,243.20 and August crude oil was down $0.01 at $68.05. Soybeans on China's Dalian Exchange were a little higher and Malaysian palm oil futures were down 0.1%.
| BULL | BEAR | ||
| 1) | USDA's lower crop ratings for corn and soybeans are giving prices an early lift Tuesday. | 1) | USDA's crop ratings slipped for row crops Monday, but remain higher than a year ago. |
| 2) | Commercials are net long soybeans, soybean oil, and Minneapolis wheat -- three commodities that are starting to look cheap. | 2) | Last Tuesday's U.S. proposal for $200 billion of tariffs against China is the latest move keeping investors skittish in the markets. |
| 3) | Chicago and K.C. wheat continue to hold above their 2018 lows. | 3) | Downtrends remain in effect for corn, soybeans, and all three wheats with potential buyers difficult to entice. |
CORN December corn is up 3 1/4 cents early Tuesday with traders responding to a three-point drop in USDA's good-to-excellent rating for corn, from 75% to 72%. Increased dryness in the southwestern Plains increased poor-to-very poor ratings in Texas, Kansas, and Missouri. Michigan also saw an increase to 20% in the poor to very poor category, due to dryness. USDA also said 63% of corn was silking. Early Tuesday, rain is falling in Nebraska and Kansas, expected to shift eastward the next couple days and cover an area from Minnesota to Missouri. Temperatures will stay hot south of Iowa, but be more moderate for the rest of the Corn Belt. Monday's lower crop rating represents the first time the 2018 corn crop has been called into question, but the rating itself is still high and above where it was a year ago. Technically, the trend in corn remains down, but could be close to finding support. USDA's outlook for lower world corn supplies in 2018-19 remains one factor that could help prices find support above last year's lows.
SOYBEANS November soybeans are up 4 cents, also responding to USDA's reduction in the good-to-excellent rating for soybeans, from 71% to 69%. Similar to corn, the top three troubled areas is terms of poor or very poor ratings are Missouri, Kansas, and Michigan -- places where more rain is needed. Kansas is getting some rain early Tuesday and Missouri should see some help the next two days, but much more is needed for the area. The seven-day forecast from the National Weather Service expects a broad rain coverage the next seven days, but as we have seen, too much rain has been a problem in the northwestern Corn Belt and forecast amounts for other areas don't always verify. Like corn, this year's soybean crop is still rated higher than last year's, but weather remains a risk here in mid-July. Aside from weather, soybean prices are cheap, weighed down by concerns over trade issues with China and commercials are net long. The trend in soybeans remains down with the seasonal low not due until early October.
WHEAT September K.C. wheat is up 6 1/4 cents early, almost erasing Monday's loss with help from commercial buying in Chicago wheat and Tuesday's higher start for row crops. Late Monday, USDA said 74% of winter wheat was harvested, the same as a year ago with Kansas down to the final one percent of its 2018 crop. From the southwestern Plains, harvest activity is slowly moving northward and then west. USDA also said 93% of spring wheat is headed and the good-to-excellent rating stayed at 80%, its highest level since 2010. Crops are drier in South Dakota and Idaho, but problems remain minimal in 2018. Outside the U.S., this year's trouble spots seem fairly well known by now and don't look to be getting better. For now, the trends remain down for all three wheats, but September Chicago and K.C. wheat are holding stubbornly above their 2018 lows, so far.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.16 | $0.06 | -$0.25 | Sep | $0.055 |
| Soybeans: | $7.69 | $0.11 | -$0.60 | Aug | $0.006 |
| SRW Wheat: | $4.63 | -$0.08 | -$0.26 | Sep | $0.002 |
| HRW Wheat: | $4.70 | -$0.06 | -$0.15 | Sep | $0.018 |
| HRS Wheat: | $5.00 | -$0.04 | -$0.28 | Sep | -$0.006 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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