DTN Closing Grain Comments

Corn, Soybeans Cautiously Higher

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was up 2 1/2 cents in the July contract and up 2 1/2 cents in the December. Soybeans were up 3 1/2 cents in the July contract and up 4 1/2 cents in the November. Wheat closed down 1 cent in the July Chicago contract, down 2 cents in the July Kansas City, and up 3 1/2 cents in the July Minneapolis contract. The June U.S. dollar index is down 0.20 at 96.83. June gold is up $7.90 at $1,261.50 while July silver is up 36 cents and July copper is up $0.0160. The Dow Jones Industrial Average is up 85 at 20,890. July crude oil is up $0.41 at $51.08. July heating oil is up $0.0195 while July RBOB gasoline is up $0.0096 and July natural gas is up $0.070.

Corn:

July corn closed up 2 1/2 cents Monday, a cautious gain as weekend rains across the Midwest added to this spring's planting concerns. DTN's five-day forecast is drier for the Western Corn Belt, but still expects moderate rain amounts from Iowa and Missouri eastward, and much heavier amounts along the Gulf and eastern coasts. With final planting dates approaching in late May and early June, it is still not clear that all the intended corn acres will be planted and keep in mind that Monday afternoon's estimate of planting progress from USDA will not take into account acres that got flooded out and need to be replanted. USDA said early Monday that 45.0 million bushels of corn were inspected for export last week, a bullish amount that has total inspections up 52% from a year ago with 15 weeks remaining in the 2016-17 marketing year. Friday's CFTC data showed noncommercials bearish in corn with 97,301 net shorts as of May 16. Commercials held 93,954 contracts net long, a good show of support for corn's value at these prices. July corn continues to trade within a sideways range and is challenging the top end at $3.79 1/2. DTN's National Corn Index closed at $3.35 Friday, priced 37 cents below the July contract and near its highest price in ten weeks. In outside markets, the June U.S. dollar index continues to drift lower, trading down 0.20 while July crude oil was up 41 cents a barrel, helped by unconfirmed talk that OPEC may extend its production cuts another nine months.

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Soybeans:

July soybeans closed up 3 1/2 cents Monday, inching higher for a second day after Brazil's real took a 6.5% dive on Thursday. While the bearish shock of last Thursday has eased, U.S. soybeans still face plenty of competition from Brazil's record harvest and concerns that soybean plantings may go higher than the 89.5 million acres USDA estimated in March. Earlier Monday, USDA said 12.8 million bushels of soybeans were inspected for export last week, another bullish showing that has total inspections up 16% in 2016-17 from a year ago, more than USDA is estimating. Friday's CFTC data showed noncommercial traders lightly bearish in soybeans with 28,823 net shorts as of May 16. Commercials remained supportive of soybean prices, holding 86,606 net longs and that involvement helped soybean prices recover from Thursday's sell-off. In spite of numerous bearish concerns of increased soybean supplies in 2017, July soybeans continue to trade sideways, above support at $9.41 1/4. DTN's National Soybean Index closed at $8.85 Friday, priced 68 cents below the July contract and down from its highest price in eight weeks.

Wheat:

July Chicago wheat closed down a penny Monday, in spite of early commercial buying and uncertainty about this year's winter wheat crops. Since western Kansas was hit by heavy snow in late April, assessing the winter wheat crop has become tougher and last week's heavy rains did not help. It doesn't seem likely that last Monday's poor-to-very-poor rating of 17% from USDA found any reason to come down for this Monday afternoon's report and winter wheat prices have started to show support, rising from last week's lows. In addition, noncommercials are still bearish in Chicago wheat with 89,400 net shorts as of May 16 while commercials remain supportive, holding 83,170 net longs. With early expectations for a modest reduction in U.S. new-crop ending wheat stocks, July Chicago wheat appears to be finding support, but still lacks a bullish argument to convince noncommercial traders that higher prices are possible. DTN's National SRW index closed at $3.97 Friday, priced 38 cents below the July contract and down from its highest price in ten weeks. DTN's National HRW index closed at $3.57, down from its highest price in ten months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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Todd Hultman