DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn 2 higher. Soybeans 1 3/4 higher. Chicago wheat 3 higher. Futures for the hard wheat varieties and most other commodities are also higher. The dollar is lower, crude oil is back above $50 per barrel, soybean oil and soybean meal are carrying over their strength from Asian trading Monday morning, and of course there are still concerns about corn-planting weather, so grain futures have started the week by moving upward.

Other Markets:

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

Corn:

Wet, cool weather is still forecast for the next several days in the Midwest, further challenging areas with unplanted or water-damaged corn fields. Although the nationwide progress numbers haven't yet fallen behind and may not look bullish in the weekly report on Monday afternoon, nevertheless in late May, the season is finally late enough that acreage switching could become a real temptation for farmers, especially with the new crop cash bids for soybeans averaging 2.5 times higher than the new crop cash corn bids nationwide. This weather concern, along with a lower U.S. dollar Monday morning, is likely to support the upward momentum on the corn futures chart. The December contract is within a dime of testing $4.00. The DTN National Corn Index, an average of nearby cash bids around the country, came to $3.35 Friday, with the national average basis level steady at 37 cents under the July futures contract.

Soybeans:

The soybean chart has stabilized since last week's antics, and most futures contracts never even attempted lower prices during the overnight session. The Brazilian real has recovered somewhat since its recent collapse, but it remains 5 percent off its high prior to President Temer's bribery scandal. This makes the price tag of Brazilian soybeans for export look attractive, right at a time when large supplies are eager to move through their ports. But to balance the equation somewhat, the U.S. Dollar Index has also slid 3 percent since May 11. It continues to move lower Monday morning, and U.S. soybeans for export remain competitively priced against Brazilian soybeans. The DTN National Soybean Index was $8.85 Friday, with average soybean basis remaining steady at 68 cents under the July futures contract.

Wheat:

KC wheat futures contracts -- and the spreads between them -- have generally returned to their pre-snow price levels, and the feeling of a standstill may carry through Monday's session as traders await the weekly Crop Progress condition numbers. So far, these aggregated crop condition observations have shown a notable portion of fields considered very poor (5 percent in last week's report) or poor (12 percent). However, those observations are likely to change as some fields get abandoned. All three wheat varieties' higher prices Monday morning can be seen in the context of higher commodity prices across the board, with crude oil leading the way (now above $50 per barrel). In the cash wheat markets, the SRW Index came to $3.97 Friday, with national average SRW basis steady at 38 cents under the July Chicago contract. Basis bids also remained steady for the hard wheat varieties Friday, with the HRW Index at $3.57 per bushel or 81 cents under the July Kansas City contract, and the Spring Wheat Index at $5.15 per bushel or 41 cents under the July Minneapolis contract.

Elaine Kubcan be reached at elaine@masteringthegrainmarkets.com

Follow Elaineon Twitter @elainekub

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