DTN Before The Bell Grain Comments

Morning CME Globex Update:

Soybeans look poised to follow through on Thursday's losses with additional trend-based selling, but corn and wheat futures charts generally remain quietly locked in their rangebound patterns. Outside markets are favorable for their continued stability as the session continues.

Other Markets:

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

Corn:

On their final trading session before a three-day Memorial Day weekend and the unofficial start to summer, corn futures contracts continue to pursue a sideways path of quiet consolidation. Meanwhile, the bullish S&P 500 stock market index surged to fresh all-time highs Thursday, and while it may experience a profit-taking pullback Friday, it nevertheless remains a strong indicator of investors' economic optimism. Minutes from the latest Fed meeting suggest another interest rate rise could be coming next month. The DTN National Corn Index, an average of nearby cash bids around the country, came to $3.32 Thursday, with the national average basis level steady at 37 cents under the July futures contract.

Soybeans:

Forces across the globe seem to be conspiring against the soybean futures market Friday morning, which has consistently traded lower through the early part of the session. The Brazilian real seems unable to recover as last week's presidential scandal continues to plague the country's confidence; Malaysian palm oil moved lower Friday; and a bouncing U.S. dollar index is putting pressure on all commodities futures. The nearby July soybean chart fell through technical support levels during Thursday's lower session, and an overall lower trend may motivate additional speculative short-selling Friday. The DTN National Soybean Index was $8.72 Thursday with average soybean basis remaining steady at 67 cents under the July futures contract. A generally dry weather forecast across the Midwest will help the planting and replanting effort for new-crop soybeans, but many farms certainly have reason to be concerned about stand losses and the ultimate yield impacts of a wet, challenging spring.

Wheat:

Spring wheat futures have maintained an upward trend through this week even while the winter wheat charts have flattened out; and little wonder when the newest U.S. Drought Monitor shows a widening and deepening cloud of dry conditions in the Dakotas and spreading into Montana. Meanwhile, excessive wetness has challenged the grain planting season on the western Canadian prairies. Millers have been hunting for high-quality, high-protein wheat this week, and the protein spreads in the cash markets have adjusted accordingly. On Thursday, the HRW Index was $3.53 or 78 cents under the July KC contract, and the average new-crop bid was effectively on par with the average countryside spot bid. So basis bids for hard red winter wheat have continued to ever-so-slowly tighten up and return toward something like normalcy as the 2017 harvest looms on the horizon. Harvest will seem closer than ever once the Memorial Day weekend has passed and "summer" arrives. Grain futures trade will be closed on Monday and resume with that evening's usual 7 p.m. (Central Time) open.

Elaine Kubcan be reached at elaine@masteringthegrainmarkets.com

Follow Elaineon Twitter @elainekub

(BAS)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.