DTN Closing Grain Comments

General Comments:

Corn closed up 1 3/4 cents in the July contract and up 1 1/2 cents in the December. Soybeans closed down 3 1/4 cents in the July and down 4 1/4 cents in the November. Wheat closed down 1 cent in the July Chicago, down 1 1/2 cents in the July Kansas City, and down 1 3/4 cents in the July Minneapolis. The June U.S. dollar index is down 0.37 at 99.13. June gold is up $3.50 at $1,227.70 while July silver is up $0.15 and July copper is up 0.0165. The Dow Jones Industrial Average is down 32 at 20,887. June crude oil is down $0.17 at $47.66. June heating oil is down $0.0007, June RBOB gasoline is up $0.0084, and June natural gas is up $0.047.

For the week:

July corn closed up 1/4 cent and December closed up 1/4 cent. July soybeans were down 10 cents while the November was down 6 3/4 cents. July Chicago wheat was down 9 1/2 cents, July Kansas City wheat was down 10 3/4 cents, and July Minneapolis wheat was down 7 3/4 cents.

Corn:

July corn closed up 1 3/4 cents Friday on light volume and was up 1/4 cent in a week which likely saw good planting progress, but also saw more rain fall on already drenched areas of the southern and eastern Midwest. Parts of Kansas also dealt with flood warnings and added to concerns that among all these wet areas, some corn acres are going to be lost, either to soybeans or for the year entirely. Wednesday's new WASDE estimates showed an unexpected boost in corn demand from Asia, the Middle East, and North Africa which gave corn prices a lift, but crop estimates were also increased for Brazil and Argentina as early 2017 has been kind to South America's crops. Lots of corn is expected to be planted this weekend as U.S. producers take advantage of a warm and dry forecast before rain returns to the northern Midwest early next week. July corn continues to trade within a sideways trend with no strong clue as to which direction prices will eventually break. DTN's National Corn Index closed at $3.30 Thursday, priced 39 cents below the July contract and still in a sideways range. In outside markets, the June U.S. dollar index is down 0.37 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 closed down 3 1/4 cents on a quiet Friday and were down a dime on the week, pressured by concerns that some lost corn acres will recover in time to be planted to soybeans. Coming on the heels of a record soybean harvest, which Brazil's government estimated at 113.0 mmt this week, the early outlook for soybean supplies in 2017 is bearish, but we still have the U.S. growing season ahead and demand clues for soybeans looking stronger than expected. The two demand notes worth repeating are that commercials turned net long in soybeans in late March as spot prices fell to the mid-$9s and the July/August futures spread is unusually narrow, also reflecting a bullish commercial outlook. With soybean supplies expected to increase and demand holding firm, July soybeans have held steady for six weeks with the upper end of the range marked at $9.83. 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.

Wheat:

July Chicago wheat closed down a penny Friday and was down 9 1/2 cents on the week as prices pulled back again from last week's snow-related excitement and may have found support near $4.25. Wednesday's WASDE report gave wheat prices little reason to trade higher as the estimate of U.S. ending stocks was modestly lower, but overruled by USDA's higher-than-expected estimate of 2017-18 world ending stocks at 258.3 mmt, a new record high for the fourth consecutive year. There is still a long way to go in 2017-18 however, and it would not be surprising to see less production and more demand than USDA currently expects. In particular, USDA's estimate that world wheat demand will be down .7% in 2017-18 is suspect, given wheat prices are still near their lowest level in ten years. The International Grains Council, for example, estimates a slight increase in world wheat demand for 2017-18. Weather conditions have been hard on this year's U.S. winter wheat and are causing delays in Canada, but still lean mostly bearish for the rest of the world. Technically, the trend in July Chicago wheat remains up, but prices have pulled back, waiting to learn more about this year's new crops. 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. DTN's National HRW index closed at $3.56, down from its highest price in ten months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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