DTN Before The Bell Grain Comments

Soybeans Higher As Planters Make Progress

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

July corn was down 1/2 cent, July soybeans were up 4 cents, and July Chicago wheat was down 4 1/2 cents. Corn was starting a little lower and soybeans a little higher early Monday after a warm weekend allowed for more planting progress. Wheat prices were lower with warmer and drier weather giving winter wheat a chance to recover from its late-April storm and heavy rains.

Other Markets:

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

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Corn:

July corn was down a half-cent early Monday with rain in South Dakota and much more expected in the central U.S. in the back half of the seven-day forecast. Corn planting likely made big progress over the weekend and, except for rain around Minnesota, has another few days open before more rain returns to the central U.S. Friday's CFTC data showed noncommercial traders in corn with 99,807 net shorts, the most bearish they've been since March 2016. Commercials on the other hand held 96,626 net longs, the most since April 2016 and a source of good support for prices. With increased supplies anticipated from South America this year, July corn remains in a sideways trading range with support at the April low of $3.61 3/4. DTN's National Corn Index closed at $3.32 Friday, priced 39 cents below the July contract and still in a sideways range. In outside markets, June crude oil is up $1.72 after Bloomberg news reported officials from Saudi Arabia and Russia favor extending production cuts.

Soybeans:

July soybeans were up 4 cents after a weekend of warmer weather allowed corn planting to make significant progress where fields were dry enough. Excess rain remains a concern from Arkansas and Missouri to Indiana and more rain is expected to return to those areas later this week. Friday's CFTC data showed noncommercial traders modestly bearish in soybeans with 29,887 net shorts as of May 9. Commercials held 85,212 net longs, still a vote of confidence for soybeans' economic value. In South America, the Buenos Aires Cereals Exchange estimated Argentina's soybean harvest at 66% complete with a mostly dry forecast for the week ahead. July soybeans have held sideways for six weeks, thanks largely to commercial support -- a bullish sign that demand has done a better than expected job of keeping up with this year's increased supplies. DTN's National Soybean Index closed at $8.92 Friday, priced 71 cents below the July contract and down from its highest price in six weeks.

Wheat:

July Chicago wheat was down 4 1/2 cents early with a drier forecast for winter wheat areas the next few days before rain returns to the southern Plains later this week. Assessing this year's winter wheat crop was made more difficult after western Kansas got hit by a late-April snowstorm and USDA will release its third attempt on Monday afternoon. Friday's CFTC data showed noncommercials still bearish in Chicago wheat with 76,293 contracts net short as of May 9, down 8,692 from the previous week. Commercials held 72,432 contracts net long, possibly holding back for lower prices. Even though it seems clear that U.S. wheat production will be lower in 2017 and the trend turned higher two weeks ago, July Chicago wheat continues to have trouble finding support. DTN's National SRW index closed at $3.91 Friday, priced 42 cents below the July contract and down from its highest price in seven weeks.

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

FollowTodd on Twitter @ToddHultman1

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Todd Hultman