DTN Before The Bell Grain Comments

Morning CME Globex Update:

July corn was down 1/2 cent, July soybeans were down 3 3/4 cents, and July Chicago wheat was unchanged. Corn and soybeans were lower early Friday with a busy weekend of planting expected where acres are not drenched. Arkansas received another hit of heavy rain overnight.

Other Markets:

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

Corn:

July corn was down a half-cent early Friday, standing pat in the middle of its sideways range after Arkansas got hit with more heavy rain overnight. Friday's rains will eventually leave the Delta and mid-South, setting up a warmer, drier weekend for planting across the central U.S. where fields are not too wet. Temperatures in the northeastern Midwest remain cool. While it still seems likely that some corn acres will be lost to this year's wet spring and USDA is predicting a lower level of ending world corn stocks in 2017-18, Brazil's second corn crop continues to do well and will compete with U.S. corn exports this summer. May U.S. grain contracts expire at noon CDT on Friday and there were 192 deliveries of May corn to start the day. July corn remains firmly entrenched in its sideways range with no sign of breakout coming yet. DTN's National Corn Index closed at $3.30 Thursday, priced 39 cents below the July contract and still in a sideways range. Outside markets are quiet early Friday with the June U.S. dollar index is down 0.24 after the U.S. Labor Department said the core rate of inflation was up 1.9% in April from a year ago, less than expected.

Soybeans:

July soybeans were down 3 3/4 cents early with both soy products also starting a little lower. There are plenty of reasons to expect soybean prices to stay under pressure and the latest one continues to be that some wet corn acres will try to switch to soybeans. With a record 111.6 mmt Brazilian soybean crop competing for exports and record high U.S. soybean plantings expected, increased soybean supplies seem likely in 2017, but of course, that depends on good growing weather and the demand side of the market is once again, looking stronger than expected. Technically, July soybeans remain in a downtrend, but are being supported by commercial buying. A close above $9.83, if it happened, would turn the trend higher. DTN's National Soybean Index closed at $8.95 Thursday, priced 71 cents below the July contract and down from its highest price in six weeks. Among May contracts, there were 93 deliveries of soybeans, 16 deliveries of soybean meal and 7 deliveries in soybean oil at the start of this final day of trading.

Wheat:

July Chicago wheat was unchanged early, a quiet Friday start in a week that saw more problematic rains from Arkansas to Indiana. Temperatures are starting near freezing in western Kansas Friday, but will turn warmer through the weekend. It remains a mystery as to how much winter wheat will be able to recover in 2017, but seems likely that USDA's production estimate of 1.82 billion bushels is too high. At the same time, USDA's estimate that world wheat use will be down .7% in 2017-18 seems unnecessarily pessimistic in a year when spot prices are still near their lowest levels in ten years. Those are not bullish arguments for Chicago wheat, but there is good reason to expect wheat prices to find better support in 2017. July Chicago wheat remains in an uptrend, but has not been able to push higher this week. DTN's National SRW index closed at $3.92 Thursday, priced 42 cents below the July contract and down from its highest price in seven weeks. Among expiring May contracts, there were 10 deliveries of Chicago wheat and 64 deliveries of K.C. wheat.

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

FollowTodd on Twitter @ToddHultman1

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