DTN Closing Grain Comments

General Comments:

Corn was up 7 1/4 cents in the September contract and up 7 1/4 cents in the December. Soybeans were up 2 3/4 cents in the August contract and up 2 1/2 cents in the November. Wheat closed up 32 1/2 cents in the September Chicago contract, up 31 cents in the September Kansas City, and up 32 1/2 cents in the September Minneapolis contract. The September U.S. dollar index is down 0.26 at 94.13. August gold is up $7.40 at $1,232.90 while September silver is up 10 cents and September copper is up $0.0170. The Dow Jones Industrial Average is down 11 points at 25,230. September crude oil is up $0.86 at $69.38. September heating oil is up $0.0204 while September RBOB gasoline is up $0.0274 and September natural gas is up 0.033.

Corn:

December corn closed up 7 1/4 cents at $3.73 1/4 with bullish influence coming from Wednesday's higher wheat prices. (I can't remember saying that for a long time.) Since making a low near $3.50 earlier this month, December corn has firmed and is making an attempt to at least hold sideways in spite of what looks like favorable crop conditions so far. Aggressive bidding for wheat prices in Europe certainly helps corn's outlook as does USDA's estimate for lower ending world corn stocks in 2018-19. On the demand side, ethanol remains a solid source of support for corn prices in 2018. The U.S. Energy Department said ethanol production increased from 1.064 million to 1.074 million barrels per day last week, while ethanol inventory slipped from 21.8 million to 21.7 million barrels. With the U.S. corn crop looking good, the trend remains down for December corn, but trading below $3.50 should be difficult, thanks to expectations for increased world corn demand. DTN's National Corn Index closed at $3.23 Tuesday, up from its lows in 2018 and 29 cents below the September contract. In outside markets, the September U.S. dollar index is down 0.29 while most commodities were higher.

Soybeans:

November soybeans ended up 2 1/2 cents at $8.75 3/4, unfazed by wheat's new popularity and more concerned about strained relations with the world's largest buyer of soybeans. U.S. Ag Secretary Sonny Perdue unveiled a three-part plan Tuesday to provide $12 billion of aid to farmers in an effort to offset the financial pain of what he estimated as an "$11 billion impact of illegal tariffs on agriculture." (See Wednesday's DTN article, "Trade Reactions Vary Wildly," by DTN Political Correspondent Jerry Hagstrom and DTN Ag Policy Editor Chris Clayton.) While providing some aid this fall may help producers partially acclimate to lower prices, sending soybeans to a food bank is likely to have little impact on soybean prices. The main concern for soybean prices continues to be this summer's beneficial weather. Adverse weather is not in the forecast yet, but a surprise is still possible. Otherwise, soybean prices are looking at another big harvest this fall and an opportunity for China to buy at prices near their lowest levels in nine years. For now, the trend remains down for November soybeans. DTN's National Soybean Index closed at $7.98 Tuesday, up from its lowest price in over nine years and priced 60 cents below the August contract.

Wheat:

Wheat prices showed the most bullish excitement among commodities on Wednesday, spurred higher by December milling wheat in Europe closing up 2.8%. The new price ended above 200 euros per metric ton for the first time in three years as dry weather concerns in Europe continue to have a bullish impact. Dow Jones reported that a private consultant, Strategie Grains, reduced its soft wheat crop estimate for Europe to the lowest in six years. Here in the U.S., September contracts of Chicago, K.C., and Minneapolis wheat closed up 32 1/2, 31, and 32 1/2 cents, respectively, bullish changes in momentum for all three. The Wheat Quality Council's Spring Wheat Tour is exploring the Dakotas and Minnesota the next few days and arrived at an average yield of 38.8 bushels an acre on day one with no significant insect or disease concerns noted. The bigger attention for wheat prices will be focused on Europe as reduced supplies there leave the U.S. as the main holder of surplus wheat in 2018-19. Wednesday's higher closes turned the trends higher for all three U.S. wheats. DTN's National SRW Index closed at $4.84 Tuesday, 27 cents below the September contract and may post a new 2018 high on Wednesday evening. DTN's National HRW Index closed at $4.94 Tuesday, but could land near $5.25 on Wednesday evening.

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

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