DTN Closing Grain Comments

New Lows in Winter Wheat

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

General Comments:

Corn was down 4 cents in the May contract and down 4 cents in the December. Soybeans were down 3 1/2 cents in the May contract and down 4 1/2 cents in the November. Wheat closed down 12 3/4 cents in the May Chicago contract, down 14 cents in the May Kansas City, and down 10 1/4 cents in the May Minneapolis contract.

The June U.S. dollar index is up 0.05 at 99.68. June gold is down $0.40 at $1,283.00 while May silver is down 15 cents and May copper is up $0.0105. The Dow Jones Industrial Average is up 201 at 20,605. June crude oil is down $0.13 at $50.72. June heating oil is down $0.0014 while June RBOB gasoline is up $0.0059 and June natural gas is down $0.030.

Corn:

May corn closed down 4 cents, still sagging lower this week while Brazil's forecast anticipates favorable showers over the second corn crop. Here in the U.S., planting remains a challenge in many areas that are too wet, but the bearish side is that dry areas are getting relief and the Climate Prediction Center now expects no significant drought in the central U.S. for the next three months. DTN's new seven-day forecast expects heavy rain from Oklahoma to the mid-Atlantic, but lighter amounts elsewhere -- allowing for some corn planting to advance. USDA said last week's corn export sales and shipments totaled 29.8 million bushels and 55.4 mb respectively, another bullish combination that is losing out to more bearish supply concerns. With Brazil's corn doing well so far, May corn prices remain under bearish pressure in a sideways trading range. DTN's National Corn Index closed at $3.26 Wednesday, priced 36 cents below the May contract and within its sideways range. In outside markets, the June U.S. dollar index is up 0.05, biding time ahead of Sunday's presidential election in France. News reports hinted that China is ratcheting up pressure on North Korea, but markets showed little reaction and June gold is roughly steady.

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Soybeans:

May soybeans closed down 3 1/2 cents Thursday, struggling to hold sideways for a third consecutive week in the face of numerous bearish concerns. Brazil's record soybean crop continues to take away U.S. export business and Thursday's report showed soybean sales and shipments at just a little more than half the previous week's levels. 7.8 mb of sales and 15.8 mb shipped were enough to stay ahead of USDA's estimated export pace, but business is obviously dwindling, and it will likely be months before the pendulum of increased sales returns to the U.S. Here in the U.S., early wet spring planting conditions are adding to concerns that soybean acres will get an unexpected boost later, but there is still time for corn to be planted. Thursday's U.S. Seasonal Drought Outlook from the Climate Prediction Center expects no significant drought across the central U.S. the next three months, and if true, it will make it difficult for row crops to trade higher this summer. May soybeans remain in a downtrend, under bearish pressure. DTN's National Soybean Index closed at $8.78 Wednesday, priced 72 cents below the May contract and up from its lowest prices in a year.

Wheat:

May Chicago wheat closed down 12 3/4 cents Thursday, posting its lowest close in 2017. Similarly, May K.C. wheat fell 14 cents to a new contract low. While these two markets started the year with rising prices, dry conditions, and wildfires in the southwestern Plains, numerous rains have improved soil moisture the past month and more is on the way in the seven-day forecast. Winter wheat crop conditions are not as high as a year ago, but they are doing well enough to protect the U.S.'s billion bushel surplus from the threat of significant reduction. Outside the U.S., Western Europe is on the dry side, but other areas are favorable and bearish traders are finding no reason to worry about their short positions. May Chicago wheat is trending lower, in need of a bullish argument. DTN's National SRW index closed at $3.80 Wednesday, priced 39 cents below the May contract and near its lowest price in over three months. DTN's National HRW index closed at $3.27, also near its lowest price in over three months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman