DTN Early Word Grains
Crop Prices Mixed Ahead Of GDP Report
December corn was down 1 cent, November soybeans were up 3 3/4 cents, and September Kansas City (HRW) wheat was down 5 cents.
CME Globex Recap:U.S. and European stock markets are a little higher early Friday along with the September U.S. dollar index as traders wait for what is expected to be a bullish report of higher U.S. GDP growth in the second quarter at 7:30 a.m. CDT. Outside of grains, most commodities are starting the day lower with August gold down $7.30.
OUTSIDE MARKETS:Previous closes on Thursday showed the Dow Jones Industrial Average up 112.97 points at 25,527.07 and the S&P 500 down 8.63 points at 2,837.44 while the 10-year Treasury yield ended at 2.97%. Early Friday, DJIA futures were up 20 points. Asian markets are mixed with Japan's Nikkei 225 up 125.88 (0.6%) and China's Shanghai Composite down 8.63 (-0.3%). European markets are modestly higher with London's FTSE 100 up 35.25 points (0.5%), Germany's DAX up 49.60 points (0.4%), and France's CAC 40 up 8.43 points (0.1%). The euro was down .0023 and the U.S. dollar index was up 0.12 at 94.90. September 30-year T-Bonds were up 1/32nd while August gold was down $7.30 at $1,218.40 and September crude oil was down $0.21 at $69.40. Soybeans on China's Dalian Exchange were steady to higher and Malaysian palm oil futures were down 0.7%.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL | BEAR | ||
| 1) | Dry conditions in the southwestern Corn Belt plus Michigan are helping support row crop prices. | 1) | USDA's good-to-excellent ratings for row crops are among the higher ratings of the past five years. |
| 2) | IGC estimates expect significant reductions in exportable world ending stocks of corn and wheat in 2018-19. | 2) | China's 25% tariff on U.S. soybeans. |
| 3) | Rising prices of milling wheat in Europe, related to dry weather have turned U.S. wheat prices higher. | 3) | Friday's report of U.S. GDP is expected to show higher growth in the second quarter, supporting the case for more rate hikes and a higher U.S. dollar. |
CORN December corn is down a penny early Friday with scattered showers around the Texas Panhandle and more rain expected in the southwestern U.S. Plains the next few days. Temperatures are cool for a late July morning with 50s and 60s across most of the Corn Belt and will stay on the cool side over the weekend. The best rain chances the next seven days are across the southern Corn Belt while northern states are mostly dry from Michigan to the Pacific Northwest. Overall, the corn crop is doing well nationally and USDA will release its first field-based yield estimate on August 10. For now, the trend in December corn remains down, but prices are challenging their five-week high at $3.80. The July low near $3.50 is a good candidate for support as USDA is expecting lower world corn supplies in 2018-19 and higher wheat prices are also offering corn more support.
SOYBEANS November soybeans are up 3 3/4 cents early Friday, up from their lows earlier in July, but not finding any argument bullish enough to challenge resistance. As described for corn above, the seven-day forecast has chances for rain across the southern Midwest and southern Plains, but coverage lately has not been as broad as advertised while the northern states are expected to be on the dry side. Cool to moderate summer temperatures will be helpful to crops the next ten days with no significant threats expected. On the trade front, there is no sign of China's 25% tariff being dropped anytime soon and if crop conditions stay favorable, they should have no problems obtaining soybeans this fall. For now, November soybeans are trading up from their lows, but the trend remains down with the seasonal low not due until early October.
WHEAT September K.C. wheat is down 5 cents early with December milling wheat in Europe down slightly, but staying above 200 euros per metric ton. As DTN's Emily Unglesbee reported Thursday evening, "the Wheat Quality Council's Hard Red Spring Wheat Tour ended Thursday with an estimated average spring wheat yield of 41.1 bushels per acre (bpa), above 38.1 bpa last year, but below the five-year average of 45.4 bpa." The main finding of this year's tour is that spring wheat crops did not live up to the expectations of USDA's 79% good-to-excellent rating and it will be interesting to see if USDA's wheat estimate gets adjusted modestly downward in August. So far, assessing the world wheat crop in 2018 has been difficult with small areas of dry weather concern evolving gradually into larger areas over time. This week's estimate from the International Grains Council of a 5% reduction in the world crop from a year ago is the largest cut estimated so far and is leaving the U.S. and the main supplier of excess wheat in 2018-19. The trends for all three wheats are currently up with weather concerns still active.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.32 | $0.02 | -$0.30 | Sep | -$0.005 |
| Soybeans: | $8.00 | $0.00 | -$0.62 | Aug | -$0.002 |
| SRW Wheat: | $5.08 | -$0.07 | -$0.28 | Sep | -$0.008 |
| HRW Wheat: | $5.18 | -$0.06 | -$0.16 | Sep | $0.004 |
| HRS Wheat: | $5.50 | -$0.01 | -$0.38 | Sep | -$0.014 |
Todd Hultman can be reached at todd.hultman@dtn.com
Todd can be followed throughout the day on Twitter @ToddHultman1
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