DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn 1 1/4 lower. Soybeans 3 lower. Chicago wheat 1/2 lower. Futures for the hard wheat varieties and most other commodities are also lower. In the grain markets, lower futures trade through the overnight session can be attributed to both a lack of bullish evidence in the weekly crop progress numbers and also an overall lower tone across widespread commodity markets, although crude oil looks poised to change direction Tuesday morning.

Other Markets:

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

Corn:

The December corn futures contract still remains within a dime of $4.00, but lower momentum throughout the commodity sector Tuesday morning is likely to drag on corn prices during the day. Farmers with underwater or still-unplanted corn fields will find it frustrating to see the nationwide 'corn planted' figure at 84 percent on USDA's weekly Crop Progress report -- almost perfectly in line with normal expectations. So the wet planting conditions in the central and northeast Corn Belt haven't fully sparked a weather rally, yet, but some of the new crop futures spreads have begun to tighten slightly in the last few trading sessions, suggesting that commercial traders have looked around their local scenarios and do indeed have some concerns about 2017's corn production. In the old crop cash market, the DTN National Corn Index, an average of nearby cash bids around the country, came to $3.38 Monday, with the national average basis level steady at 37 cents under the July futures contract.

Soybeans:

Soybean futures were lightly lower overnight following the weekly Crop Progress report, reinforcing the sense that 2017 planting decisions have worked out bearishly for soybeans. However, soybeans do have their own planting concerns, too. Wisconsin and Michigan, in particular, have experienced such an excess of rain this spring that their entire row crop season has fallen behind, with soybean planting 10 or 14 percentage points behind their five-year averages. Although in some locations, the late corn planting may lead to acreage switching and additional U.S. soybean production in 2017, it's getting late enough and wet enough to also wonder whether some of these northern fields will eventually need to be considered 'Prevented Plant' acres. Not everything is bearish for the Chicago soybean market on Tuesday, therefore, especially with the Brazilian real remaining stable while the U.S. dollar continues to trend lower. The DTN National Soybean Index was $8.89 Monday, with average soybean basis remaining steady at 68 cents under the July futures contract. At 8 a.m. USDA reported 126,000 mt of soybeans sold to unknown for delivery in 2016-2017.

Wheat:

The Southern Plains' Hard Red Winter wheat crop has gone from drought-stricken to snow-bitten and now to a well-watered, thriving crop in a lot of places, with the downward-trending July futures chart AND the weekly Crop Progress numbers reflecting that scenario. Ahead of the five-year average pace, already 72 percent of U.S. winter wheat fields have headed. The winter wheat condition ratings showed relatively more good-and-excellent fields and relatively fewer poor-and-very poor fields than last week, and with additional rain in the forecast, many farmers' main concern about their wheat may now be managing disease pressure. In the cash wheat markets, the SRW Index came to $3.97 Monday, with national average SRW basis steady at 38 cents under the July Chicago contract. Spring wheat basis bids also remained steady Monday, with the Spring Wheat Index at $5.19 per bushel or 41 cents under the July Minneapolis contract. The HRW Index continues to pull closer and closer into line with the July futures contract (on Monday it was $3.57 or "only" 80 cents under the July KC contract), showing the one silver lining of this year's weather concerns -- perhaps the cash market will eventually pull back toward a "normal" relationship with the futures market.

Elaine Kubcan be reached at elaine@masteringthegrainmarkets.com

Follow Elaineon Twitter @elainekub

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