DTN Before The Bell Grain Comments

Morning CME Globex Update:

July corn was up 3 3/4 cents, July soybeans were up 2 1/4 cents, and July Chicago wheat was up 2 1/2 cents. Grains are seeing a partial rebound from Tuesday's losses early after USDA's crop ratings for corn revealed some of this spring's problems with excess moisture. The U.S. dollar index is starting modestly lower ahead of Wednesday afternoon's Beige Book release.

Other Markets:

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

Corn:

July corn was up 3 3/4 cents early Wednesday, staying firmly entrenched within its sideways range while the market tries to assess this year's planting and crop conditions. Late Tuesday, USDA said 91% of the corn was planted, 73% was emerged, and 65% was rated good-to-excellent. DTN's Corn Condition Index of 158 matches the reading in 2013 and is the lowest in four years. Poor-to-very-poor ratings were highest in Indiana, Illinois, Ohio, and Kansas and DTN's seven-day forecast shows more moderate to heavy rain amounts on the way to those same four states. On the other hand, crops in Iowa, Minnesota, and Nebraska are off to excellent starts, setting up another year of contrasting conditions. In the meantime, July corn continues to trade within its sideways range with no sign yet of breaking either direction. DTN's National Corn Index closed at $3.30 Tuesday, priced 37 cents below the July contract and down from its highest price in 11 weeks. In outside markets, the June U.S. dollar index is down 0.14 with the Federal Reserve's Beige Book due out Wednesday afternoon, possibly offering a rate clue for June's meeting.

Soybeans:

July soybeans were up 2 1/4 cents with early help from commercial buying in soybean meal. Late Tuesday, USDA said 67% of soybeans were planted and 37% were emerged, closed to their five-year average paces, but corn conditions revealed the problems of too much rain, especially in the states mentioned above. DTN's forecast expects rain in the southern Plains the next three days and then more moderate to heavy amounts in the eastern Midwest this weekend. The wider planting window for soybeans gives them a better chance to work around this year's wet weather, but it is still not clear how many acres will be planted and the Aug. 10 report of prevented acres from USDA will have extra attention this year. In spite of this spring's planting concerns, increased soybean supplies are expected this year and that is keeping July soybeans in a downtrend. DTN's National Soybean Index closed at $8.46 Tuesday, priced 67 cents below the July contract and at its lowest price in over a year.

Wheat:

July Chicago wheat was up 2 1/2 cents early Wednesday, taking back part of Tuesday's loss with more rain headed to the southern Plains and eastern Midwest the next seven days. USDA adjusted its good-to-excellent rating on winter wheat slightly lower, but the more important points were the high poor-to-very poor ratings of 25%, 20%, and 18% in Kansas, South Dakota, and Illinois, respectively. USDA also said 96% of spring wheat was planted and 62% was rated good-to-excellent. The most troublesome state for spring wheat is South Dakota, sporting an early poor-to-very-poor rating of 23%. In the bigger picture, USDA's estimate that U.S. wheat production will be down 21% in 2017 is reasonable and it is looking like Canada's wheat acres will also be down. That should help wheat prices hold support in the low-$4s in 2017, but prices still don't have a strong argument for trading higher and so far, noncommercials remain heavily bearish. DTN's National SRW index closed at $3.94 Tuesday, priced 35 cents below the July contract and down from its highest price in 11 weeks.

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

Follow ToddTwitter @ToddHultman1

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