DTN Closing Grain Comments

General Comments:

Corn was up 7 1/2 cents in the July contract and up 6 3/4 cents in the December. Soybeans were up 7 1/4 cents in the July contract and up 4 cents in the November. Wheat closed up 9 cents in the July Chicago contract, up 8 cents in the July Kansas City, and down 3 1/4 cents in the July Minneapolis contract. The June U.S. dollar index is up 0.10 at 96.69. August gold is down $9.20 at $1,288.30 while July silver is down 15 cents and July copper is up $0.0050. The Dow Jones Industrial Average is up 42 at 21,178. July crude oil is down $2.31 at $45.88. July heating oil is down $0.0423 while July RBOB gasoline is down $0.0580 and July natural gas is down $0.023.

Corn:

July corn finished up 7 1/2 cents Wednesday, posting its highest close in three months with help from DTN's forecast for hotter temperatures this weekend, especially in the western Plains. The five-day forecast is mostly dry across the Midwest, but there is a chance for some showers to possibly reach North Dakota, an area that is already too dry. Wednesday's higher close also came in the face of expectations for a higher estimate of Brazil's corn production in Friday's WASDE report. The U.S. Energy Department said Wednesday morning that ethanol production slipped from 1.020 million to .999 million barrels a day last week while inventory dropped from 22.8 million to 22.0 million barrels -- a bullish sign of ethanol demand as the driving season gets going. Weather markets are notoriously volatile and we have seen rallies evaporate quickly the past two years. That may happen again, but at least we have seen commercial support for prices in the mid-$3s and are likely facing a smaller estimate of U.S. ending corn stocks in 2017-18. Thanks to Wednesday's higher close, July corn is trending higher. DTN's National Corn Index closed at $3.40 Tuesday, priced 38 cents below the July contract and at its highest price in three months. In outside markets, the June U.S. dollar index is up 0.10 after the Organization for Economic Cooperation and Development estimated world GDP growth at 3.5% in 2017, the best performance since 2011, reported RTTNews.com.

Soybeans:

July soybeans closed up 7 1/4 cents as commercial buying was likely mixed with noncommercial short-covering in the face of the hotter temperatures in this weekend's forecast, especially in the western Plains. Of course, that spells trouble for the Dakotas where conditions are already dry and the forecast bears watching as the heat is expected to migrate eastward next week. If you recall, extreme heat was not expected in NOAA's forecast for June so this is a bullish surprise for traders. July soybean meal also closed higher Wednesday, up $3.80 and just one week after commercials turned net long in meal for the first time in over a year. Friday's WASDE report may show another bump up in the estimate of Brazil's soybean production, but make no mistake -- it's all about weather this summer. In spite of Wednesday's higher close, July soybeans remain in a downtrend. DTN's National Soybean Index closed at $8.58 Tuesday, priced 66 cents below the July contract and near its lowest prices in over a year.

Wheat:

July Chicago wheat closed up 9 cents and July K.C. wheat was up 8 cents with temperatures in the southwestern Plains expected to ratchet up into the mid-90s and higher Friday and into the weekend. We can safely say that this year's winter wheat crop has nearly seen it all, starting with an early spring in February, snow at the end of April, heavy spring rains, mosaic virus and now, hot temperatures. And we can't forget that wheat started with the lowest all wheat plantings in the U.S. in over a century. Winter wheat prices have stayed fairly depressed in early 2017, but are showing potential to now trade higher after leaving behind a higher low in May. Of course, much will ride on how the weather plays out, but the expansion of drought in the Dakotas is no small matter this early in the season. July Chicago wheat is showing signs of resuming the uptrend that began in early May. DTN's National SRW index closed at $4.05 Tuesday, priced 31 cents below the July contract and near its highest price in twelve weeks. DTN's National HRW index closed at $3.64, near its highest price in eleven months.

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

Follow Todd Hultman on Twitter @ToddHultman1

(CZ)

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