DTN Before The Bell Grain Comments

Morning CME Globex Update:

December corn was down 3 1/2 cents, November soybeans were down 20 3/4 cents, and September Chicago wheat was down 4 1/4 cents. Grains were starting lower again Friday in spite of having excessive heat warnings over the heart of the Corn Belt. Rain in southern Illinois is offsetting some of Friday's heat Friday, but bears are also bolstered by a more favorable forecast for crops next week.

Other Markets:

Dow Jones:	Higher
U.S. Dollar Index:	Higher
Gold:	Lower
Crude Oil:	Lower

Corn:

December corn was a few cents lower early Friday in spite of excessive heat warnings across the Corn Belt. Heat-countering rain is falling around southern Illinois early Friday and traders are expecting this week's heat wave to back off after Saturday. The 6 to 10 day forecast also looks bearish with mostly normal temperatures and above-normal precipitation expected. So far, the 2016 corn crop is skating by with high ratings, setting prices up for further selling between now and harvest time. December corn remains under bearish pressure. DTN's National Corn Index closed at $3.04 Thursday, priced 30 cents below the September contract and at its lowest price in over 20 months. In outside markets, the U.S. dollar index is up .13, continuing to trade higher while other major economies are struggling.

Soybeans:

November soybeans were down 20 3/4 cents early Friday, following through on Wednesday's new two-month low with further selling. Some of Friday's selling is from commercials, but the larger threat is from the noncommercial side after investors built up their largest net-long positions in nearly four years. Even though this summer is turning out to be hotter than recent years, the rains have been adequate in most growing areas to sustain a good crop and that has pushed prices to new lows this week. Soybean prices at the U.S. Gulf still have a sizeable advantage over the more expensive beans in Brazil, but bearish supply factors are ruling prices now and probably will continue to do so until early October. November soybeans remain under bearish pressure. DTN's National Soybean Index closed at $9.76 Thursday, priced 37 cents below the November contract and near its lowest price in over two months.

Wheat:

September Chicago wheat was 4 1/4 cents lower early, weighed down by falling row crop prices and by wheat's own bearish fundamentals. DTN's seven-day forecast is expecting moderate rain amounts in the northwestern Plains, but the outlook remains dry for spring wheat in Montana and the Pacific Northwest. The bottom line is that USDA is expecting another year of record high world wheat production and a 9.2 mmt increase in global ending stocks. With corn production also looking good in the U.S., there is nothing bullish that can be said on wheat's behalf other than it is so cheap that prices should be able to hold roughly sideways. DTN's National SRW index closed at $3.85 Thursday, priced 33 cents below the September contract and near its lowest cash price in six years.

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

FollowTodd on Twitter @ToddHultman1

(KA)

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