DTN Closing Grain Comments

Soybeans Jump Higher on Hint of New Talks

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was up 5 cents in the September contract and up 5 1/4 cents in the December. Soybeans were up 28 3/4 cents in the August contract and up 28 cents in the November. Wheat closed up 7 1/4 cents in the September Chicago contract, up 8 3/4 cents in the September Kansas City and up 5 1/4 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.19 at 94.30. December gold is up $1.90 at $1,233.40, while September silver is up 4 cents and September copper is up $0.0410. The Dow Jones Industrial Average is up 159 points at 25,466. September crude oil is down $1.09 at $69.04. September heating oil is down $0.0289, while September RBOB gasoline is down $0.0259 and September natural gas is up 0.002.

Corn:

December corn closed up 5 1/4 cents at $3.86 1/2, helped by a drier seven-day forecast and bullish influence from Tuesday's higher soybean prices. Tuesday's weather map showed decent rains from southern Illinois to Ohio, but only part of the Corn Belt will receive much rain the next seven days. Fortunate areas include Minnesota to Ohio, including Michigan, while the southern and western regions will be mostly dry. Temperatures will stay moderate in the eastern Corn Belt, but start to get hotter in the central and western Corn Belt late this week, adding stress to crops that have not seen much yet this year. Late Monday, USDA kept its good-to-excellent rating for corn at a favorable 72%. In the bigger picture, the July low of $3.50 1/4 should hold as support this year with USDA expecting lower ending world corn stocks in 2018-19. For now, the trend is sideways with weather presenting a bullish threat as we move into August. DTN's National Corn Index closed at $3.37 Monday, up sharply from its lows in 2018 and 30 cents below the September contract. In outside markets, the September U.S. dollar index is trading up 0.19 with no rate hike expected at the conclusion of Wednesday's Federal Reserve meeting.

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Soybeans:

November soybeans closed up 28 cents at a new five-week closing high of $9.19 after Bloomberg News reported that U.S. Treasury Secretary Mnuchin and Chinese Vice Premier Liu He are having private conversations, looking for a solution to the current standoff over trade issues between the two countries. It is not exactly a shock that conversations are taking place and the news is a long way from an actual agreement, but it apparently was enough to trigger speculative buying and simultaneous short-covering. In addition to the Bloomberg article, this week's forecast for mostly dry weather and hotter temperatures on the way to the central and western Midwest while soybeans are setting pods also gave bullish influence to Tuesday's soybean prices. USDA's good-to-excellent rating of 70% for soybeans is still good for this time of year, but crop ratings don't mean much when weather risk is still active. Tuesday's higher closes turned the trends higher in both, November soybeans and December soybean meal. DTN's National Soybean Index closed at $8.13 Monday, well up from its lowest price in over nine years and priced 78 cents below the November contract.

Wheat:

September Chicago wheat closed up 7 1/4 cents and September K.C. wheat was up 8 3/4 cents at $5.56 1/2, staying near the higher end of this year's prices while dry weather remains a concern for developing wheat crops. The December milling wheat price in Europe was quieter Tuesday, ending up 0.12% and is still near its highest prices in three years. Late Monday, USDA said 85% of winter wheat was harvested and 4% of the spring wheat crop was done, mostly gathered from South Dakota. USDA still has a high good-to-excellent rating for spring wheat at 78%, but last week's spring wheat tour raised a lot of doubts that crops were actually that good. The hot and dry seven-day forecast for the northwestern U.S. Plains, southern Canadian Prairie and Pacific Northwest adds to concerns that spring wheat yields will not be as high as many were thinking before last week's tour. With weather concerns still active, the trends for all three U.S. wheats remain up. DTN's National SRW index closed at $5.18 Monday, 28 cents below the September contract and at a new 2018 high. DTN's National HRW index closed at $5.31 Monday, near its highest price in 2018.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman