DTN Before The Bell Grain Comments

Wheat Higher, Row Crops Quiet

Todd Hultman , DTN Grains Analyst
(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

December corn was up 1 1/2 cents, November soybeans were unchanged, and September Chicago wheat was up 8 cents. September Chicago wheat was 8 cents higher early Monday, helped by commercial buying at these low prices and a mostly dry forecast for spring wheat crops this week. Corn and soybeans stayed close to Friday's closes with more rain and milder temperatures expected to keep crops in good condition this week.

Other Markets:

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

Corn:

buying after testing lower prices on Sunday evening. Friday's CFTC data showed noncommercials still holding 130,624 net-longs in corn as of July 19, but commercial net-shorts have dropped to 66,533 in response to corn's lower prices. Monday afternoon's Crop Progress report is apt to show another week of high crop ratings, helped by July's rains. The anticipation of a record corn crop ahead is keeping prices on the defensive and it will be difficult for prices to rally while crop conditions are doing so well. December corn remains under bearish pressure, but should find increased commercial support in below $3.50. DTN's National Corn Index closed at $3.06 Friday, priced 29 cents below the September contract and near its lowest price in over 21 months. In outside markets, the U.S. dollar index is down .05, trading cautiously ahead of Wednesday's Federal Reserve announcement after TheGuardian.com reported this weekend's G20 members said they remained committed to fostering growth.

Soybeans:

November soybeans were steady early with light commercial buying in response to Friday's close below $10. The weekend saw selected showers across the Midwest and while temperatures were hot, crop conditions are likely to stay relatively high in Monday afternoon's report from USDA. This week's forecast remains benign for row crops with milder temperatures and widespread chances for rain across the Midwest. So far, there are also more chances for rain in the extended forecast which is beneficial for pod-filling. Friday's CFTC data showed noncommercial net-longs in soybeans at 202,146 as of July 19, down 13,960 from the previous week, but still a big position, full of bullish hope. While Brazil's soybean supplies are tight, the demand scenario remains supportive for U.S. soybean prices. The big question is the size of the next U.S. harvest and so far, high harvest expectations are keeping November soybean prices under bearish pressure. DTN's National Soybean Index closed at $9.51 Friday, priced 37 cents below the November contract and at its lowest price in over three months.

Wheat:

September Chicago wheat was surprisingly higher early Monday with buying coming from the commercial sector after noncommercials were caught with their largest net-short position since April in Friday's CFTC report. CFTC data showed noncommercial net-shorts in Chicago wheat at 92,121 as of July 19 while commercials were net long 85,271 contracts, continuing to support and benefit from wheat's cheap prices. Along with wheat prices benefitting from commercial support, DTN Canadian Grains Analyst Cliff Jamieson also noted Friday that milling wheat prices in Paris were showing unexpected gains worth watching after their heavy rains this summer. The fundamental case remains remains bearish for wheat, but it is encouraging to see signs of support at these cheap levels. September Chicago wheat remains under bearish pressure, but should be able to keep trading roughly sideways. DTN's National SRW index closed at $3.93 Friday, 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)

Todd Hultman