DTN Closing Grain Comments

General Comments:

July corn closed down 2 1/4 cents per bushel and December corn was down 1 1/2 cents. July soybeans closed down 3 1/2 cents and November soybeans were down 2 1/2 cents. July KC wheat closed down 1/2 cent, July Chicago wheat was down 1/2 cent and July Minneapolis wheat was down 1 1/4 cents. The June U.S. dollar index is trading down 0.004 at 97.395. The Dow Jones Industrial Average is up 79.65 points at 26,044.74. June gold is down $3.90 at $1,281.70, July silver is down $0.07 at $14.86 and July copper is down $0.0150 at $2.7705. June crude oil is up $0.61 at $62.01, June heating oil is up $0.0184, June RBOB is up $0.0250 and June natural gas is up $0.068.

Corn:

July corn closed down 2 1/4 cents at $3.64 1/4 Wednesday, encountering more bearish pressure with a drier forecast after Thursday and a widely watched WASDE report coming on Friday. It was unusual to see corn trade lower on a day when moderate-to-heavy rains worked their way eastward from the western U.S. Plains into the Midwest. Wednesday's rain is not going to help planting prospects in the near term, but a drier forecast after Thursday is giving some hope that planting conditions will get a better chance in mid- or late-May. The U.S. Energy Department said last week's ethanol production increased from 1.024 million barrels per day to 1.036 million barrels per day, back to a higher pace after suffering in early 2019. USDA's May WASDE report is due out Friday at 11 a.m. CDT and will include new-crop estimates for both, the U.S. and the world. In the case of corn, new-crop ending stocks are expected to still be slightly above 2.0 billion bushels (bb), virtually the same as the past few years. Current planting problems probably won't be factored into Friday's estimates and are still highly uncertain on the 8th of May. Fundamentally speaking, corn supply expectations suggest a neutral price outlook, but outside trade concerns are adding to the bearish mood for corn prices. Technically, cash corn is near the middle of its 2019 trading range and the weekly stochastic has turned up. There were 1,131 contracts open in May corn early Wednesday. DTN's National Corn Index closed at $3.41 Tuesday, 26 cents below the July contract and back in its narrow, sideways range. In outside markets, the June U.S. dollar is down 0.01 and non-ag commodities are mixed.

Soybeans:

July soybeans ended down 3 1/2 cents at $8.27 1/4 Wednesday, continuing to slink lower ahead of this week's U.S.-China trade talks and Friday's WASDE report. Media sources began to explain late Tuesday that Sunday's new tariff threats were preceded by news that China backtracked on months of negotiated agreements, trying to draft a less-demanding deal. U.S.-China trade talks are scheduled to resume Thursday and the U.S. will raise tariffs on Chinese goods starting Friday. On Wednesday, CNBC.com and others reported President Donald Trump as saying Chinese negotiators are coming to the U.S. "to make a deal." It is difficult to know just what that means, but the short story is that China is maintaining its 25% tariff on U.S. soybeans and July soybean prices are showing the bearish pressure, trading near their lowest prices since 2008. Friday's WASDE report is not apt to offer soybean prices much support. Dow Jones' survey expects USDA to estimate new-crop U.S. ending soybean stocks at 943 mb, a number that could eventually be much larger if a trade deal is not struck with China before this fall. Technically, the trend in cash soybean prices is down with noncommercials comfortably net short. May soybean contracts are slowly dwindling away, now showing1,482 contracts open as of early Wednesday. DTN's National Soybean Index closed at $7.45 Tuesday, 86 cents below the July contract and near its lowest price in 12 years.

Wheat:

July KC wheat ended down a half-cent at $4.03 1/2 Wednesday, another quiet day of trading that has helped prices stabilize in May. Plenty of rain fell around the southwestern U.S. Plains Wednesday, prompting flood advisories in Kansas and Oklahoma. Flash flood watches also included parts of Missouri, Arkansas and eastern Texas. This is not seen as a significant production threat, but Wednesday's rain plus more unwelcome amounts headed to SRW wheat areas on Thursday may take some of the shine off USDA's high crop ratings. The northwestern U.S. Plains have a drier looking 7-day forecast with above normal temperatures in the 6- to 10-day period. Friday's WASDE report is not only going to remind us how plentiful U.S. wheat supplies are this season, but will also likely show a similar outcome expected in 2019-20. Outside of North America, most of the world's major wheat regions are showing favorable conditions early in 2019, a bearish factor that is keeping potential buyers uninterested in wheat. Technically, spot KC wheat is near its lowest prices in 13 years, while the weekly stochastic is close to showing a bullish change in momentum and deserves monitoring. DTN's National HRW Index closed at $3.88 Tuesday, up from its lowest close in over a year and 16 cents below the July contract. DTN's National SRW Index closed at $4.12, holding above its March low. Trading is extremely thin for May wheat contracts with expiration set for May 14.

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

FollowTodd on Twitter @ToddHultman1

(BAS)

Copyright 2019 DTN/The Progressive Farmer. All rights reserved.