DTN Closing Grain Comments

Crop-Friendly Weather Keeps Lid on Grains

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 2 1/4 cents in the May contract and down 1 3/4 cents in the December. Soybeans were up 2 cents in the May contract and up 4 3/4 cents in the November. Wheat closed down 3 3/4 cents in the May Chicago contract, down 7 cents in the May Kansas City and down 10 cents in the May Minneapolis contract.

The June U.S. dollar index is down 0.66 at 99.57. April gold is up $10.70 at $1,244.70 while May silver is up 12 cents and May copper is down $0.0550. The Dow Jones Industrial Average is down 193 at 20,712. May crude oil is down 0.86 at $48.05. May heating oil is down $0.0144 while May RBOB gasoline is down $0.0123 and May natural gas is up $0.053.

Corn:

May corn closed down 2 1/4 cents Tuesday, testing its lowest prices in 11 weeks. Corn prices have been wrestling with the bearish anticipation of a record crop from Brazil this summer and crop conditions are favorable so far, but much will depend on getting adequate precipitation next month at pollination time. In the meantime, U.S. corn prices are much cheaper than Brazil's prices, so the U.S. continues to win increased export business while we wait for Brazil's next crop. Technically, the trend in May corn turned lower in early March, but downside risk seems limited while U.S. demand is doing so well. DTN's National Corn Index closed at $3.23 Monday, priced 40 cents below the May contract and near its lowest price in 11 weeks. In outside markets, the June U.S. dollar index is down 0.66 at its lowest price in six weeks. Aiding the move, consumer prices in the U.K. were higher than expected for February and Bloomberg.com reported that French centrist Emmanuel Macron outpolled the anti-EU candidate, Marine Le Pen, after the first presidential debate.

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Soybeans:

May soybeans closed up 2 cents Tuesday, staying sideways within last week's narrow trading range. Fundamentally speaking, Brazil's soybean harvest continues to make good progress and USDA's 108.0-million metric ton estimate is certainly bearish, at least until harvest pressure subsides. The demand side of the equation, however, is more difficult to measure and even though, soybeans' trend is down, May prices have stalled here lately, near $10.00. The other oddity is that in spite of Brazil's record harvest, U.S. soybean prices remain close to Brazil's and are competitive enough to keep attracting export business to the U.S. May soybeans remain in a downtrend, but similar to a year ago, prices are not acting as bearish as one might expect during Brazil's harvest -- at least not yet. DTN's National Soybean Index closed at $9.21 Monday, priced 78 cents below the May contract and near its lowest price in four months.

Wheat:

May Chicago wheat closed down 3 3/4 cents, posting its lowest close in 11 weeks. Winter wheat prices remain under bearish pressure with rain in the 10-day forecast for the southwestern Plains -- the best chances in over a month. It is still too early for any serious assessments of 2017's winter wheat crops, but so far, no major threats outside the southwestern U.S. Plains are being talked about, and that puts the attention back on wheat's large surpluses. After a brief rally to start the year, noncommercials are comfortably net short again. Technically, May Chicago wheat remains in a downtrend, but sideways trading seems more likely for at least another month. DTN's National SRW index closed at $3.87 Monday, priced 44 cents below the May contract and near its lowest close in five weeks. DTN's National HRW index closed at $3.53 and near its lowest price in five weeks.

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

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Todd Hultman