DTN Closing Grain Comments

General Comments:

Corn closed down 8 cents in the July contract and down 5 cents in the December. Soybeans closed down 8 cents in the July contract and down 1/2 cent in the November. Wheat closed down 17 cents in the July Chicago contract, down 12 1/2 cents in the July Kansas City, and down 7 3/4 cents in the July Minneapolis contract.

The June U.S. dollar index is up .30 at 95.80. August gold is up $2.30 at $1,219.00 while July silver is down $0.28 and July copper is down $0.0190. The Dow Jones Industrial Average is down 94 at 17,779. July crude oil is up $0.01 at $49.34. July heating oil is up $0.0112 while July RBOB gasoline is down $0.0078 and July natural gas is up $0.125.

Corn:

July corn closed lower Tuesday, pulling back from Friday's new seven-month high with a more favorable forecast for row crops the next two weeks. Light-to-moderate rain amounts covered much of the central Plains Monday, west of the Mississippi River and are still falling, moving slightly eastward on Tuesday. Heavy rain in Oklahoma and Texas will be a problem again this week, but drier weather should help planting pick up in the eastern Midwest later this week and next week. U.S. corn prices continue to benefit from dry conditions in Brazil and the improved export pace should continue. Early Tuesday, USDA identified a previous sale of 4.7 million bushels (120,000 metric tons) of corn to unknown as being for Taiwan. USDA also said that last week's inspections of corn totaled 31.0 million bushels with the total for 2015-16 still behind the estimated pace. Friday's CFTC data showed noncommercial net-longs in corn at 183,168 as of May 24, up 37,796 from the previous week and the most since August 2015. Fundamental concerns of another big corn crop this fall are keeping traders cautious, but last week's breakout from corn's narrow six-month range is technically bullish. DTN's National Corn Index closed at $3.77 Friday, priced 35 cents below the July contract and at its highest price in ten months. In outside markets, the U.S. dollar index is up .30 after CNBC reported that U.S. consumer spending was up 1.0% in April, the biggest jump in over six years.

Soybeans:

July soybeans closed lower in the old-crop months, but were just slightly lower in new-crop with some support from Tuesday's export news. USDA said that 2.7 million bushels (73,000 mt) of old-crop soybeans and 5.1 million bushels (140,000 mt) of new-crop soybeans were sold to unknown destinations. USDA also said that last week's export inspections of soybeans totaled 6.7 million bushels, which keeps the total for 2015-16 below USDA's estimated pace. It is the demand side of the market that has been pushing soybean prices higher, but the greater need appears to be coming later this summer when Brazil's exports normally wind down. Friday's CFTC data showed noncommercial net-longs in soybeans at 224,577 as of May 24, down slightly from the previous week, but still representing a bullish view with 79% of all noncommercial positions long. July soybeans remain in an uptrend with concerns that the next U.S. crop could still total 4 billion bushels, keeping prices under $11. DTN's National Soybean Index closed at $10.18 Friday, priced 68 cents below the July contract and at its highest price in twenty months.

Wheat:

July Chicago wheat fell sharply lower Tuesday, erasing last week's gain as prices continue to slug it out in the same old sideways range. USDA's wheat inspections for export totaled 738 million bushels with five days remaining in 2015-16, some 42 million bushels below USDA's estimate. Exports are sluggish, old-crop wheat supplies remain burdensome, and so far, the next winter wheat crop has received high marks with harvest just weeks away. USDA's next crop ratings may come down a bit Tuesday afternoon after Kansas was hit with severe weather last week, but a big winter wheat harvest still seems likely. Friday's CFTC data showed noncommercial net-shorts in Chicago wheat still bearish at 78,881 as of May 24, up 12,760 from the previous week. Commercials were net-long 73,853 contracts, continuing to find good value at these low prices. July Chicago wheat continues to trade within a narrow six-month range -- ripe for a breakout, but lacking a solid bullish reason. DTN's National SRW Wheat Index contract closed at $4.39 Friday, priced 43 cents below the July contract and within its narrow six-month range. DTN's National HRW Index closed at $3.91, a little above its lowest price in nearly six years.

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

Follow Todd on Twitter @ToddHultman1

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