DTN Early Word Grains
Corn, Wheat Start a Little Higher
July corn is up 1 1/4 cents, July soybeans are down 2 3/4 cents and July KC wheat is up 1 3/4 cents.
CME Globex Recap:Dow Jones futures are starting lower early Friday, ahead of the first estimate of U.S. GDP in the first quarter, due out at 7:30 a.m CDT. The June U.S. dollar index is down 0.09 and outside commodities are mixed. June crude oil is down 85 cents.
OUTSIDE MARKETS:Previous closes on Thursday showed the Dow Jones Industrial Average down 134.97 at 26,462.08 and the S&P 500 down 1.08 at 2,926.17, while the 10-yr Treasury yield ended at 2.53%. Early Friday, DJIA futures are down 27 points. Asian markets are lower with Japan's Nikkei 225 down 48.85 (-0.2%) and China's Shanghai Composite down 37.43 points (-1.2%). European markets are lower with London's FTSE 100 down 26.84 points (-0.4%), Germany's DAX down 11.10 points (-0.1%), and France's CAC 40 down 5.79 points (-0.2%). The June Euro is unchanged at $1.119 and the June U.S. dollar index is down 0.090 at 97.82. The June 30-Year T-Bond is up 7/32nds, while June gold is up $4.10 at $1,283.80 and June crude oil is down $0.85 at $64.36. Soybeans and meal on China's Dalian Exchange were both a little lower.
| BULL | BEAR | ||
| 1) | There is plenty of rain in the seven-day forecast, adding to corn planting difficulties. | 1) | Without a trade agreement, U.S. ending soybean stocks are at risk of nearing 1 billion bushels (bb). |
| 2) | July soybean meal is lower Friday, but jumped up $5.60 a short ton Thursday, possibly related to concerns about the risk of debt default in Argentina. | 2) | Early reports from the world's wheat regions are largely favorable for crops. |
| 3) | Noncommercial sentiment is bearish for grains overall and at its lowest reading for corn at this time of year since 2002. | 3) | Still waiting for a trade agreement with China, while trade status with major ag markets remains uncertain. |
CORN July corn is up 1 1/4 cents early Friday, holding Thursday's small gain after a bearish slide to new contract lows this week. Friday's weather map has rain adding to already wet conditions in Indiana, Ohio, Michigan and areas to the east. The central Midwest is expecting rain this weekend with possibly snow in Minnesota, followed by heavy rains next week from the southern U.S. Plains into the eastern Corn Belt. Overall, the forecast is largely wet the next ten days and keeps planting concerns open into early May. As many know and have commented, those concerns have been no match yet for the heavy selling from the noncommercial side of the market that has occurred the past two months, but those sales are now obligations to buy, potential support for future prices.
SOYBEANS July soybeans are down 2 3/4 cents and July soybean meal is down $1.50, taking some of the bullish polish off Thursday's $5.60 gain. Fundamentally, the outlook for soybean prices remains bearish as the anticipation of record U.S. ending soybean stocks in 2018-19 weighs on prices with no relief seen yet for the new-crop season. Even larger ending stocks are possible, if negotiations with China don't go well and the prospect of that is enough to scare potential buyers away. For some hard to explain reason, soybean meal prices have been holding above their support of the past three years and this week's Todd's Take column will talk more about that later Friday. The one positive for soybean prices continues to be that commercial remain willing to take the net long side of the market, a hopeful sign that demand may be better than expected.
WHEAT July KC wheat is up 1 3/4 cents early, having possibly caused enough damage for one week as prices are down roughly 13 cents since last Thursday. Spot KC wheat prices are nearing $4.00 and are also not far from the low of 2017 at $3.91 1/2, prices where support should be found. Early in 2019 however, support may be difficult to nail down as the U.S. wheat market is looking at a carry in excess of 1 bb to start the new season and favorable early crop conditions. As with soybeans, the bullish help in this market is coming from commercials willing to take the long side at these cheaper levels. The best hope for higher wheat prices each year is a weather problem in one or more of the world's major wheat regions. Australia continues to contend with dry conditions and it is early, but most concerns are minor at this time.
| DTN Cash | Change From | National | Contract | Change from | |
| Commodity | Index | Prev Day | Avg. Basis | Month | Prev Day |
| Corn: | $3.28 | $0.01 | -$0.19 | May | $0.007 |
| Soybeans: | $7.80 | $0.04 | -$0.80 | May | $0.004 |
| SRW Wheat: | $4.12 | $0.02 | -$0.23 | May | -$0.001 |
| HRW Wheat: | $3.93 | $0.00 | -$0.11 | May | $0.003 |
| HRS Wheat: | $4.72 | $0.02 | -$0.33 | May | $0.001 |
Todd Hultman can be reached at todd.hultman@dtn.com
Toddcan be followed throughout the day on Twitter @ToddHultman1
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