DTN Closing Grain Comments

General Comments:

May corn closed down 3/4 cent per bushel and December corn was down 3/4 cent. May soybeans closed down 9 cents and November soybeans were down 8 3/4 cents. July KC wheat closed up 3 3/4 cents, May Chicago wheat was up 2 cents and July Minneapolis wheat was up 1/4 cent. The June U.S. dollar index is trading up 0.023 at 96.675. The Dow Jones Industrial Average is down 11.79 points at 26,440.87. June gold is down $0.60 at $1,276.60, May silver is up $0.02 at $14.94 and May copper is up $0.0340 at $2.9645. May crude oil is down $0.27 at $63.78, May heating oil is down $0.0098, May RBOB is up $0.0106 and May natural gas is down $0.056.

Corn:

May corn continued its downward slide Wednesday, losing 3/4 cent to $3.58 1/4 on light volume without any news to shake the grain market out of its bearish mood. Wednesday's weather map showed light-to-moderate showers across the Northern Plains, much of which fell over southern Minnesota, while the rest of the Corn Belt was mostly drier. Thursday and Friday's forecast expects heavy rain again over the Mississippi Delta and southeastern U.S., stretching through the eastern Midwest to Ontario and adding further delays getting into fields. The fact that we have seen a lot of planting happen in a narrow window before is keeping noncommercials comfortably net short so far. As DTN Senior Ag Meteorologist Mike Palmerino mentioned in Tuesday's blog on DTN, "Midwest Fields to Remain Saturated," the weather pattern in early May will be critical this year. While May corn futures sag toward their contract low, national average cash prices are staying close to their one-year average at $3.38. DTN's National Corn Index closed at $3.37 Tuesday, 22 cents below the May contract. In outside markets, the June U.S. dollar index is up 0.02, Dow Jones Industrials are slightly lower and other commodities are mixed.

Soybeans:

May soybeans fell 9 cents to $8.79 Wednesday, the lowest close in over five months as bearish concerns continue to wear on those waiting for a new trade agreement with China. Similarly, November soybeans finished down 8 3/4 cents to their lowest close in over four months at $9.12 1/4. Concerns about record-high U.S. ending soybean stocks in 2018-19, the lack of U.S. soybean exports while China maintains a 25% tariff, and a possibility of higher-than-expected soybean plantings in 2019 are all playing a part in pulling prices lower. As traders have heard for months, U.S.-China trade talks are said to be going well, but without an official announcement, it is difficult to counter all the bearish arguments soybeans face. Historically speaking, USDA's current estimate of ending soybean stocks representing 22% of annual use point to cash soybean prices in the neighborhood of $6.00 to $7.00, lower than USDA's estimated range of $8.35 to $8.85 for 2018-19. There is plenty of uncertainty ahead, both in the new-crop season and with trade talks. Technically, the trend in May soybeans turned down with Wednesday's lower close. DTN's National Soybean Index closed at $8.05 Tuesday, 83 cents below the May contract and will be near its March low on Wednesday.

Wheat:

July Kansas City wheat gained back 3 3/4 cents to end at $4 26 1/4 Wednesday, but is still having a bearish week after Tuesday's new contract low. Spot prices have a recent history of support in the $3.75 to $4.00 range and commercials are already modestly net long. However, the fundamental outlook remains bearish with no strong argument available for traders to expect higher prices. As we have mentioned often the past several months, U.S. wheat supplies are plentiful, HRW wheat exports are sluggish and so far, the new winter wheat crop is getting high good-to-excellent ratings from USDA in spite of excessively wet areas of SRW wheat. Outside the U.S., it is also difficult to find bullish hope as most weather concerns are minor and early conditions are favorable in Ukraine and Russia. In such a bearish atmosphere, the trends of cash prices for all three wheats are down with prices searching for support. DTN's National HRW Index closed at $4.05 Tuesday, 12 cents under the May contract and near its March low. DTN's National SRW Index closed at $4.22, still up from its lowest prices in a year.

Todd Hultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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