DTN Before The Bell Grain Comments

More Soybean Sales to Unknown

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

Morning CME Globex Update:

December corn was down 1 cent, November soybeans were down 3 cents, and September Chicago wheat was down 2 cents. At 8 a.m., USDA announced that 2.4 million bushels (66,000 mt) of U.S. soybeans were sold for 2015-16 and another 2.3 million bushels (63,000 mt) were sold for 2016-17 to unknown destinations. Before the announcement, grains were lower as crops continue to benefit from mild summer temperatures at the end of July.

Other Markets:

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

Corn:

December corn was a penny lower early Friday with light showers in Michigan and more moderate amounts in Kansas and Oklahoma. Mild summer temperatures will again prevail throughout the Midwest and stay until early next week when a few more days of hotter weather arrives. Overall crop conditions have been very good this summer for the central Corn Belt and it seems that we are in for another record harvest this fall. Corn demand is actually having a good year while Brazil's supplies are tight, but it is not enough to match the possibility of nearly 15 billion bushels of new supplies and that is keeping prices depressed as we close out July. With crop ratings high in 2016, December corn remains under bearish pressure. DTN's National Corn Index closed at $3.02 Thursday, priced 29 cents below the September contract and near its lowest price in 21 months. In outside markets, the U.S. dollar index is down .88 after RTTNews.com reported real GDP for the Eurozone came in a little higher than expected while U.S. GDP was less than expected with a gain of 1.2% in the second quarter from a year ago.

Soybeans:

At 8 a.m., USDA announced that 2.4 million bushels (66,000 mt) of U.S. soybeans were sold for 2015-16 and another 2.3 million bushels (63,000 mt) were sold for 2016-17 to unknown destinations. Before the announcement,
November soybeans were a few cents lower while more crops are finding temperatures pleasant at pod-setting. This week's forecast expects moderate rain amounts over much of the central and eastern Midwest, but the extended forecast looks drier after the first week of August. For many areas, this week's rains will give soybean crops a significant boost and the anticipation of that is keeping bearish pressure on prices. Soybean prices have now spent seven weeks pulling back from their highs and may be finding support above the 200-day average at $9.55, thanks to the demand side of the market. As of Thursday evening, soybean prices at the U.S. Gulf were 87 cents a bushel cheaper than at Brazil's ports, a bullish advantage for increased export business ahead. DTN's National Soybean Index closed at $9.45 Thursday, priced 33 cents below the November contract and near its lowest price in three months.

Wheat:

September Chicago wheat was a couple cents lower early Friday in spite of drier spring wheat conditions this year. The Wheat Quality Council's Hard Spring Wheat Tour wrapped up on Thursday with a final yield estimate of 45.5 bushels an acre, down from 49.5 bushels a year ago. Harvest is still about a month away, but if the estimate is accurate, this year's U.S. spring wheat crop will total 507 million bushels, down about 15% from last year's 599 million bushels. That might be bullish news in some years, but not in 2016 when the U.S. is expecting another surplus of over a billion (with a "b") bushels at the end of 2016-17. DTN's ten-day outlook expects the northwestern Plains to remain mostly dry in August, except for some rain chances in eastern North Dakota in the next seven days. September Chicago wheat prices remain confined to depressed levels while no significant threats are seen to this year's high supplies. DTN's National SRW index closed at $3.76 Thursday, priced 34 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

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Todd Hultman