DTN Closing Grain Comments

General Comments:

Corn was up 1/2 cent in the September contract and up 1/2 cent in the December. Soybeans were up 4 1/2 cents in the August contract and up 4 3/4 cents in the November. Wheat closed up 1 3/4 cents in the September Chicago contract, up 4 3/4 cents in the September Kansas City, and up 5 cents in the September Minneapolis contract. The September U.S. dollar index is down 0.15 at 94.90. December gold is up $3.10 at $1,221.40 while September silver is up 8 cents and September copper is up $0.0020. The Dow Jones Industrial Average is down 32 points at 25,597. September crude oil is down $2.35 at $66.82. September heating oil is down $0.0540 while September RBOB gasoline is down $0.0839 and September natural gas is up 0.049.

CORN:

December corn ended up a half-cent at $3.85 in a quiet day of trading as many continue to wait for the release of USDA's next WASDE report on Friday morning. If Dow Jones' survey of analysts is correct, USDA will increase its corn yield estimate from 174.0 bushels per acre to 176.3 bpa and will increase the crop estimate from 14.23 billion to 14.42 billion bushels. However, the first significant yield guess of the year is not easy to make as USDA crop ratings are not accurate predictors and there is not much else to go by until Friday's report. The U.S. Energy Department said ethanol production increased to 1.100 million barrels a day last week, close to its all-time high. However, ethanol inventory increased from 22.0 million to 22.9 million barrels, signaling a concern about demand. The seven-day forecast expects heavy rain across northern Texas moving eastward, but the only significant amounts for the Corn Belt are expected in Indiana and Ohio. Fundamentally, this year's corn crop should be doing better than a year ago, but that bearish factor is offset by USDA expecting lower ending world corn stocks in 2018-19. Technically, the trend in December corn is sideways with a lot we still don't know about this year's crop. DTN's National Corn Index closed at $3.40 Tuesday, up from its lows in 2018 and 31 cents below the September contract. In outside markets, September crude oil is down $2.35 with China getting ready to enact a 25% tariff against imports of U.S. crude oil and diesel on August 23.

Soybeans:

November soybeans closed up 4 3/4 cents at $9.10 1/2 Wednesday, a quiet day of trading with traders keenly aware that a surprise could be waiting in Friday's WASDE report from USDA. Dow Jones' survey expects USDA to estimate a higher yield of 49.8 bushels an acre and a larger, 4.43 billion bushel crop. This year's weather has been generally more favorable than a year ago and makes a higher yield estimate reasonable. However, it is always difficult to say just how much higher the yield might be so that is likely where the risk is in Friday's report. On the demand side, Dow Jones reported China's soybean imports were down 4% in the first seven months of 2018 from a year ago, averaging roughly 280 million bushels a month. There has been talk of China minimizing its soybean needs while it remains in a dispute with the U.S. so it could keep the 25% soybean tariff in place, possibly even through the fall and winter when China is most apt to buy U.S. soybeans. Fundamentally, it is difficult to have an opinion on soybean prices at a time when trade policy could change unexpectedly either way. For now, the trends are technically higher in both, November soybeans and December soybean meal, but a sideways, erratic path may be more likely during this volatile time of year. DTN's National Soybean Index closed at $8.26 Tuesday, up from its lowest price in over nine years and priced 79 cents below the November contract. In August contracts, delivery intentions totaled 668 for soybeans and 531 for soybean oil early Wednesday. There have been no delivery intentions yet for soybean meal.

Wheat:

September Chicago wheat closed up 1 3/4 cents at $5.70 after a day of light-volume trading. September K.C. wheat was up 4 3/4 cents and September Minneapolis wheat was up a nickel with dry weather and hot temperatures stressing spring wheat crops in the northwestern U.S. and western Canadian Prairies. Also benefiting from the region's hot weather, December oats closed up 9 1/4 cents and November canola was up C$8.10. In Europe, better chances for scattered showers of light to moderate amounts helped December milling wheat end down 1 1/4 euros or 0.6% lower. Dow Jones's survey expects USDA to show a small reduction in the estimate of U.S. wheat production, to 1.85 billion bushels. More attention however, will be on USDA's estimate of world wheat production with supporting interest in every major producing region. The issue for wheat this season is not so much that total world supplies will be tight, but that exportable supplies of world wheat will be significantly lower and that could eventually show up as higher exports for the U.S. With dry weather concerns active and crop estimates changing, the trends for all three U.S. wheats remain up. DTN's National SRW Index closed at $5.39 Tuesday, 29 cents below the September contract and near a new high in 2018. DTN's National HRW Index closed at $5.60 Tuesday, also 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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