DTN Closing Grain Comments

General Comments:

Corn was down 5 1/2 cents in the July contract and down 5 cents in the December. Soybeans were down 31 cents in the July contract and down 23 cents in the November. Wheat closed down 1 1/4 cents in the July Chicago contract, down 1/2 cent in the July Kansas City, and up 4 1/2 cents in the July Minneapolis contract.

The June U.S. dollar index is up 0.43 at 97.89. June gold is down $11.70 at $1,247.00 while July silver is down 30 cents and July copper is down $0.0125. The Dow Jones Industrial Average is up 116 at 20,723. July crude oil is up $0.41 at $49.82. July heating oil is up $0.0166 while July RBOB gasoline is up $0.0094 and July natural gas is up $0.005.

Corn:

July corn closed down 5 1/2 cents, succumbing to bearish pressure after another corruption scandal in Brazil took the real down over 8% at one point Thursday, making it more difficult for U.S. corn and soybean prices to compete for exports. Bloomberg news and others reported late Wednesday that two JBS SA executives handed over tapes to the Supreme Court that held recordings of President Temer allegedly authorizing the payment of bribes to the former speaker of Brazil's lower house. While we cannot know if the evidence is legitimate, investors wasted no time on Wednesday evening selling Brazil's stock market, the Bovespa, and currency, the real. At the same time, U.S. corn planting remains a difficult challenge in the central and southern Midwest with more rain expected the next five days. USDA said last week's export sales and shipments of corn totaled 27.8 million bushels and 60.8 million bushels respectively, another bullish combination for the week ignored by this week's political concerns. In spite of Thursday's drop in Brazil's real, July corn continues to trade within a sideways range and is holding above 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 10 weeks. In outside markets, the 6% drop in the June Brazilian real is giving investors another reason to be cautious in the same week that former FBI Director Robert Mueller was appointed special counsel to investigate alleged interference by Russia and possibly others into the 2016 U.S. election.

Soybeans:

July soybeans dropped 31 cents Thursday on the heels of a 6% drop in Brazil's real after news broke that Brazil's President Temer may have been involved in wrongdoing, as described above. Among crops, the soy complex took the news especially hard as over 50% of U.S. soybeans produced in 2017 are slated for export and no one expected a fire sale overnight from Brazil, the U.S.'s number one competitor. Before Wednesday evening, July soybeans had been holding steady for the past six weeks with concerns that this spring's difficulties planting corn would possibly lead to more soybean acres. Early Thursday, USDA said last week's export sales and shipments of soybeans totaled 13.1 mb and 12.7 mb respectively, a neutral to bullish combination for the week that went overlooked in Thursday's trading. Brazil's news adds more unexpected bearish pressure to soybean prices and makes it more likely that we may see the July contract take out the April low of $9.41 1/4. With wet fields, planting problems and new scandals erupting, 2017 is coming up with more excitement than typically seen in May. So far, most of the surprises have been bearish for soybeans. DTN's National Soybean Index closed at $9.07 Wednesday, priced 69 cents below the July contract and at its highest price in seven weeks.

Wheat:

July Chicago wheat closed down 1 1/4 cents, influenced by Thursday's lower grain prices, but not as directly impacted by Brazil's lower currency as wheat has many competitors elsewhere around the globe. The more immediate concern for wheat this year is the condition of the new winter crop, which has been through a lot and is facing a forecast for more heavy rain across the Southern Plains the next five days. Canada also has a wet forecast and is seeing a delay in spring planting. Early Thursday, USDA said last week's export sales and shipments of wheat totaled 9.1 mb and 24.7 mb, neutral-to-bearish amounts that offer no threat to the largest U.S. ending wheat stocks in 30 years. Technically, July Chicago wheat remains in an uptrend but continues to trade near its lows while traders wait to learn more about this year's crops. DTN's National SRW index closed at $3.89 Wednesday, priced 42 cents below the July contract and down from its highest price in 10 weeks. DTN's National HRW index closed at $3.55, down from its highest price in 10 months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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