DTN Before The Bell Grain Comments

Morning CME Globex Update:

July corn was down 1 3/4 cents, July soybeans were up 2 1/2 cents, and July Chicago wheat was up 1/2 cent. Wheat and soybeans are showing a little follow-through from Monday's gains, but Tuesday's early mood is quieter as traders look ahead to a mostly drier week of weather with warmer temperatures.

Other Markets:

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

Corn:

July corn was down 1 3/4 cents early Tuesday, a quiet start after Monday's 11-cent gain related to adverse weather over the weekend. Monday's Crop Progress report showed 34% of U.S. corn planted, but the stats of Missouri being 67% planted and Illinois 63% planted are out the window with many fields now underwater in those two states. Tuesday's weather map is starting mostly clear, but more rain is expected to return to Missouri and Illinois on Wednesday. In the meantime, Brazil's second corn crop is said to be doing well and corn harvest is making progress in Argentina. July corn continues to trade within a sideways range, now challenging resistance at $3.79 1/2. DTN's National Corn Index closed at $3.37 Monday, priced 41 cents below the July contract and at its highest in eight weeks. There were 730 contracts of May corn delivered early Tuesday. In outside markets, the June U.S. dollar index is up 0.03, staying quiet as the Federal Reserve begins its two-day meeting and is expected to keep interest rates unchanged.

Soybeans:

July soybeans were up 2 1/2 cents early with a modest gain in soybean oil after palm oil futures were up 1.6% overnight. Late Monday, USDA said 10% of soybeans were planted, but of course, some of those are now in flooded fields and more rain is headed to Missouri and southern Illinois on Wednesday. Some flooded corn acres may be planted to soybeans later, but there is also a concern that some acres will be lost, depending on how the next six weeks of weather goes. Meanwhile, northeastern Argentina has a chance for light to moderate showers this week, but soybean harvest is past the one-third mark and making better progress. Technically, July soybeans remain in a downtrend with concerns of increased supplies in 2017. On the other hand, prices continue to hold above the outside weekly reversal of three weeks ago, thanks to increased commercial support. DTN's National Soybean Index closed at $8.95 Monday, priced 75 cents below the July contract and near its highest price in five weeks. Among May contracts, there were 861 deliveries in soybeans and 629 deliveries in soybean oil.

Wheat:

July Chicago wheat was up a half-cent and K.C. wheat was up 3 cents Tuesday, still finding light support after a weekend of snow and heavy rain on winter wheat crops. USDA said late Monday that 42% of winter wheat was headed so there is little doubt that crops were vulnerable to the snow that affected 40% of the Kansas crop. USDA's unchanged good-to-excellent crop rating of 54% as of Sunday is obviously bizarre and serves as a sober reminder that USDA's weekly reports are not as dependable as advertised. Winter wheat will benefit from this week's warmer temperatures and DTN Crops Technology Editor will be giving us reports from the U.S. Wheat Quality Council's Kansas crop tour in an effort to understand how much damage has been inflicted. As of Monday, the price trends for July Chicago and K.C. wheat have both turned higher. DTN's National SRW index closed at $4.09 Monday, priced 47 cents below the July contract and at its highest price in seven weeks. Among May contracts, there were 349 deliveries of Chicago wheat and 742 deliveries of K.C. wheat early Tuesday.

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

FollowTodd on Twitter @ToddHultman1

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