DTN Closing Grain Comments

Commercials Respond, Lift Grains Higher

Todd Hultman , DTN Grains Analyst
(DTN illustration by Nick Scalise)

General Comments:

Corn closed up 6 1/2 cents in the July contract and up 6 1/4 cents in the December. Soybeans closed up 8 1/4 cents in the July and up 7 cents in the November. Wheat closed up 9 1/2 cents in the July Chicago, up 12 cents in the July Kansas City, and up 11 cents in the July Minneapolis. The June U.S. dollar index is down 0.77 at 97.00. June gold is up $1.90 at $1,254.70 while July silver is up $0.15 and July copper is up 0.0515. The Dow Jones Industrial Average is up 170 at 20,833. July crude oil is up $0.88 at $50.54. July heating oil is up $0.0337, July RBOB gasoline is up $0.0400, and July natural gas is up $0.079.

For the week:

July corn closed up 1 1/2 cents and December closed up 1 1/2 cents. July soybeans were down 10 cents while the November was down 8 cents. July Chicago wheat was up 2 1/2 cents, July Kansas City wheat was down 1 1/4 cents, and July Minneapolis wheat was up 9 1/4 cents.

Corn:

After a week of scandal-related news, first from the U.S. and then from Brazil, July corn closed up 6 cents Friday and was up 1 1/2 cents on the week. After all was said and done, corn planting probably made some progress this week, but still has farther to go and the forecast is not friendly. DTN's seven-day outlook expects more heavy rain in the central and Southern Plains and over the eastern half of the U.S. With final planting dates for corn ranging from late-May to early June, time is running out and fields are still too wet in many important areas of the Corn Belt. In spite of this week's bearish currency hit from Brazil, July corn continues to trade within a sideways range, helped by commercial support and ongoing concerns about this year's planting. DTN's National Corn Index closed at $3.29 Thursday, priced 37 cents below the July contract and still within its sideways range. In outside markets, the June U.S. dollar index is down 0.77 and is on track to lose 2% this week, pressured somewhat by this week's appointment of a special counsel in the U.S.

Soybeans:

July soybeans closed up 8 1/4 cents Friday, but was down a dime on the week, hurt by Thursday's unexpected drop in the Brazilian real. When the dust cleared on Thursday, Brazil and the U.S. shared the cost of the real's 7% drop as Brazil's local soybean price jumped 4% higher while the U.S. soybean price dropped roughly 3%. The result is that both prices expressed in U.S. dollars per bushel remain within a nickel of each other and allow the U.S. to keep earning export business at a time when Brazil typically dominates soybean trade. In the meantime, 2017's wet spring weather remains a concern for planting that could either add to soybean acres or take away soybean acres, depending on how wet fields stay the next four or five weeks. Thanks to Friday's response of commercial buying in soybeans, July soybean prices are still in a sideways range, holding above the April low of $9.41 1/4. DTN's National Soybean Index closed at $8.76 Thursday, priced 69 cents below the July contract and near its lowest price in four weeks.

Wheat:

July Chicago wheat closed up 9 1/2 cents and July K.C. wheat was up 12 cents Friday, once again showing concern about the condition of this year's U.S. winter wheat crops. On top of Thursday night's severe storms in Kansas and Oklahoma, the seven-day forecast expects more moderate to heavy showers ahead with risks of flooding in the same two states. So far in 2017, the U.S. winter wheat crop has dealt with an early spring in February, cold temperatures in March, snow in late April, some flooding in May, and don't forget the Mosaic virus seen on this month's crop tour. With the U.S. likely to see a smaller pile of wheat at the end of 2017-18, July Chicago wheat prices should be able to at least stabilize in the low-$4s in 2017 and could even trade higher if other wheat regions around the world also ran into problems. DTN's National SRW index closed at $3.87 Thursday, priced 39 cents below the July contract and in the middle of a sideways range. DTN's National HRW index closed at $3.45, down from its highest price in ten months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(BAS)