DTN Before The Bell Grain Comments

Morning CME Globex Update:

July corn was down 6 1/4 cents, July soybeans were down 20 3/4 cents, and July Chicago wheat was down 2 1/2 cents. A newspaper account implicating Brazil's President Temer in a corruption scandal sent Brazil's real lower overnight and prompted selling in soybeans. Corn and wheat were also lower early Friday, as investors turned risk averse in several commodities overnight.

Other Markets:

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

Corn:

July corn was down 6 1/4 cents early as noncommercial concerns broadened from one political scandal in the U.S. to another one happening in Brazil. Brazil's currency, the real, is down 6.7% early Thursday after a newspaper reported information which implicated Brazil's President Temer for the first time in Brazil's ongoing corruption investigation. The lower real instantly makes Brazil's corn and soybeans cheaper for importers to buy and puts bearish pressure on U.S. corn and soybean prices to compete. Early Thursday, USDA said last week's export sales and shipments of corn totaled 27.8 and 60.8 million bushels respectively, another bullish combination for the week ignored by this week's political concerns. Here in the U.S., more rain is headed to the central and southern Midwest the next few days which adds to planting challenges. In the midst of political turmoil, July corn continues to trade within a sideways range with support at $3.61 3/4. DTN's National Corn Index closed at $3.34 Wednesday, priced 38 cents below the July contract and near its highest price in ten weeks. In outside markets, the June Brazilian real is down 6.7%, giving investors more reasons to be cautious this week.

Soybeans:

July soybeans were down 20 3/4 cents early Thursday, reeling from late Wednesday's news in Brazil described above which sent the real to its lowest prices in 2017 and put new pressure on U.S. soybean prices to compete for exports. USDA said last week's export sales and shipments of soybeans totaled 13.1 and 12.7 million bushels respectively, a neutral to bullish showing which put total sales on the books 57 million bushels over USDA's current export estimate. For six weeks, the anticipation of increased soybean supplies in 2017 was unable to push prices lower, but Thursday's break related to new political concerns in Brazil is taking prices closer to April's low of $9.41 1/4 and threatens a resumption of the bearish trend. DTN's National Soybean Index closed at $9.07 Wednesday, priced 69 cents below the July contract and near its highest price in seven weeks.

Wheat:

July Chicago wheat was down 2 1/2 cents Thursday with early commercial selling adding to the morning's bearish mood for grains. Wheat is not as affected by changes in Brazil's currency and actually benefits from the U.S. dollar index trading at its lowest price in six months. USDA said early Thursday that last week's export sales and shipments of wheat totaled 9.1 and 24.7 million bushels, a neutral to bearish combination for the week which offers no threat to wheat's large ending U.S. supplies. This year's winter wheat crop has been through a lot and remains difficult to assess. On top of that, more rain is headed to the southern Plains the next few days with heavy amounts targeted for eastern Kansas. July Chicago wheat prices continue to hold above their April low of $4.16 with lots of unanswered questions about this year's U.S. winter wheat crop. DTN's National SRW index closed at $3.89 Wednesday, priced 38 cents below the July contract and down from its highest price in nine weeks.

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

FollowTodd on Twitter @ToddHultman1

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