DTN Closing Grain Comments

Warmer Forecast Sends Winter Wheat, Corn Lower

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

General Comments:

Corn was down 8 1/4 cents in the July contract and down 7 3/4 cents in the December. Soybeans were down 1 cent in the July contract and down 5 1/4 cents in the November. Wheat closed down 16 1/4 cents in the July Chicago contract, down 18 3/4 cents in the July Kansas City and down 13 3/4 cents in the July Minneapolis contract.

The June U.S. dollar index is down 0.40 at 98.68. June gold is down $19.90 at $1,228.60 while July silver is down 23 cents and July copper is down $0.0315. The Dow Jones Industrial Average is down 18 at 20,940. June crude oil is down $2.37 at $45.45. June heating oil is down $0.0626 while June RBOB gasoline is down $0.0637 and June natural gas is down $0.057.

Corn:

July corn closed down 8 1/4 cents Thursday, pressured by a more favorable forecast for planting and crop development, once Thursday's heavy rains clear out of the eastern Midwest. Warmer temperatures are already coming in from the western Plains and should help soil conditions significantly along with the drier forecast. It will still take a while for flooded areas to dry out and parts of Missouri and southern Illinois may not recover in time for corn. Meanwhile, Brazil's second crop continues to do well and harvest is making progress in Argentina even though there is some more rain in the seven-day forecast. Early Thursday, USDA said last week's export sales and shipments of corn totaled 30.4 million bushels and 48.3 mb respectively, lower amounts than the previous week, but enough to still be considered bullish. Total corn shipments are up 51% in 2016-17 from a year ago and should give USDA something to think about for their May 10 WASDE report. July corn remains in a sideways trading range with bearish pressure from South America and this favorable turn in the forecast. DTN's National Corn Index closed at $3.34 Wednesday, priced 40 cents below the July contract and still in a sideways range. There were 544 contracts of May corn delivered early Thursday. In outside markets, most commodities were lower and the June U.S. dollar index is down 0.40 after BBC News reported most of the French press regarded Macron as Wednesday night's debate winner, ahead of France's election on Sunday.

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Soybeans:

July soybeans closed down a penny Thursday, also pressured by Thursday's warmer and drier seven-day forecast and by a return of noncommercial selling. It was interesting that July soybean oil held slightly lower Thursday with traders interested in Friday's report of canola stock levels in Canada. According to Cliff Jamieson, DTN grain analyst in Canada, traders are expecting to see canola stocks at 6.7 million metric tons, but the range of estimates is wide and a surprise is possible. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 11.7 mb and 23.5 mb respectively, lower amounts than the previous week, but still bullish in terms of USDA's estimated export pace. So far, soybean shipments are up 18% in 2016-17 from a year ago with 18 weeks left in the season. Technically, the five-week trend in soybeans is still pointed down, but prices continue to hold above the support of the outside weekly reversal, posted three weeks ago. DTN's National Soybean Index closed at $9.01 Wednesday, priced 74 cents below the July contract and near its highest price in five weeks. Among May contracts, there were 49 deliveries in soybeans, 320 deliveries in soybean oil, and 226 deliveries of soybean meal early Thursday.

Wheat:

July Chicago wheat dropped 16 1/4 cents Thursday, giving back much of Monday's big gain. Similarly, July Kansas City wheat was down 18 3/4 cents. The seven-day forecast expect drier weather for winter wheat crops after Thursday with Kansas temperatures returning to the 80s this weekend. That will give crops a better chance for recovery where possible, but it will not mend broken wheat stems in western Kansas. Day two of this week's HRW crop tour settled on an average yield of 46.9 bushels an acre and day three came in at 58.9 bushels. Both are still fairly high, but keep in mind that many fields in western Kansas were kept out of the tally as they were too difficult to evaluate under snow. Late Thursday, DTN Crops Technology Editor Pam Smith reported the tour's final estimate of Kansas wheat production was 282 mb, down from USDA's estimate of 467.4 mb in 2016. Early Thursday, USDA said export sales and shipments of wheat totaled 9.5 mb and 22.9 mb respectively, a bearish showing for the week that has total exports up 33% from a year ago, roughly on pace with USDA's export estimate. In spite of Thursday's selloff, July Chicago and K.C. wheat both remain in new uptrends with lots of questions still open about the new season. DTN's National SRW index closed at $4.10 Wednesday, priced 44 cents below the July contract and near its highest price in seven weeks. DTN's National HRW index closed at $3.78, down from its highest price in10 months. There were 150 deliveries of K.C. wheat early Thursday.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman