DTN Closing Grain Comments

General Comments:

Corn was up 2 1/4 cents in the September contract and up 2 1/2 cents in the December. Soybeans were up 1/2 cent in the August contract and up 1/4 cent in the November. Wheat closed down 6 1/4 cents in the September Chicago contract, down 6 3/4 cents in the September Kansas City, and up 1/2 cent in the September Minneapolis contract.

The September U.S. dollar index is up 0.37 at 94.49. August gold is down $7.40 at $1,224.40 while September silver is down 13 cents and September copper is down $0.0040. The Dow Jones Industrial Average is up 133 points at 25,547. September crude oil is up $0.43 at $69.37. September heating oil is up $0.0263 while September RBOB gasoline is up $0.0296 and September natural gas is up 0.005.

Corn:

December corn closed up 2 1/2 cents at $3.75 3/4 as prices tested, but stayed below their five-week high. Earlier in the day, all three wheat prices were trading higher, but the bullish momentum that followed Wednesday's big gains collapsed, leaving only corn with a slightly higher close. Since Friday, July 13, December corn has been helped by USDA's estimate for lower ending world stocks in 2018-19. On Thursday, the International Grains Council posted even more bullish estimates for world corn, expecting ending stocks of the world's top four corn exporters to total 49 mmt, down 25% from a year ago and less than USDA's ending stocks estimate of 56 mmt. Of course, all production estimates are currently suspect while crops are still developing, but so far, crop conditions appear mostly favorable in the U.S. with moderate to cool temperatures expected across most of the Corn Belt the next five days. On the demand side, old-crop corn exports are falling short of USDA's goal. Early Thursday, USDA said last week's export sales and shipments of corn for 2017-18 totaled 13.3 million bushels (mb) and 50.5 mb respectively, a bearish combination for the week that is aiming 200 mb below USDA's export estimate of 2.4 billion bushels (bb). New-crop corn sales totaled 29.4 mb. So far, the trend remains down for December corn, but trading below $3.50 should be difficult, thanks to expectations for lower exportable corn supplies in 2018-19. DTN's National Corn Index closed at $3.30 Wednesday, up from its lows in 2018 and 29 cents below the September contract. In outside markets, the September U.S. dollar index is up 0.37 with traders expecting a bullish report of second-quarter U.S. GDP growth early Friday.

Soybeans:

November soybeans ended up a quarter-cent at $8.76 Thursday, giving back an earlier gain of 20 cents, which followed news that the White House made progress with European officials to avoid another tariff battle and Europe agreed to buy more soybeans and liquid natural gas. Just how many soybeans Europe plans to buy is not yet known, but it is not unreasonable after Argentina suffered drought in early 2018 and much of Brazil's crop was taken by China. Overall, it is difficult to see Wednesday's news as too bullish, except that it did cause some noncommercial short-covering for a while. In the bigger picture, soybean traders should be much more interested in China's purchases than Europe's, and so far, there is no progress on that front. The seven-day forecast remains mostly favorable for soybean crops with rain expected in the southern Midwest while temperatures will be moderate to cool for much of the Midwest. The International Grains Council increased its 2018-19 world soybean production estimate from 358 to 359 million metric tons (mmt) Thursday and also increased the world ending stocks estimate from 41 to 44 mmt. Earlier, USDA said last week's export sales and shipments of soybeans totaled 19.8 mb and 30.3 mb respectively, a neutral amount for the week. New-crop soybean sales totaled 35.4 mb. With U.S. soybean crops doing well so far and USDA's next estimate due out Aug. 10, the trend remains down for November soybeans. DTN's National Soybean Index closed at $7.99 Wednesday, up from its lowest price in over nine years and priced 61 cents below the August contract.

Wheat:

September Chicago wheat closed down 6 1/4 cents and September Kansas City wheat was down 6 3/4 cents at $5.34, both still holding gains for the week, thanks to Europe's dry weather. September Minneapolis wheat finished up a half-cent with slight help from Day 2 of the Wheat Quality Council's Spring Wheat Tour. Wednesday's average yield of 41.1 bushels per acre (bpa) was up from 35.7 bpa a year ago, but tour participants noted a wide variety of conditions, including fields with small, stressed-looking crops (see "Spring Wheat Tour - Day 2" by DTN's Emily Unglesbee). The mixed observations fell short of USDA's rosy crop rating and helped spring wheat prices hold firm. To the north, Producer.com reported Canada's Prairie Tour ended with an average yield of 54.4 bpa, up from 53.8 bpa a year ago. On the demand side, USDA said last week's export sales and shipments of wheat totaled 14.2 mb and 15.0 mb respectively. The sales showed modest improvement from the previous week, but both numbers are well below USDA's anticipated pace for 2018-19. We want to keep close watch on those export numbers moving forward, however, as the International Grains Council said Thursday it expects ending wheat stocks in the top eight exporting countries to be down 25% in 2018-19. They also expect world wheat production to be down 5% in 2018-19. As of Wednesday, the trends for all three U.S. wheats remain up. DTN's National SRW index closed at $5.15 Wednesday, 27 cents below the September contract and at a new 2018 high. DTN's National HRW index closed at $5.24 Wednesday, within reach of its 2018 high.

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

Follow Todd Hultman on Twitter @ToddHultman1

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