DTN Before The Bell Grain Comments

Grains Get That Summer Feeling

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

July corn was up 4 1/4 cents, July soybeans were up 7 1/2 cents, and July Chicago wheat was up 5 1/2 cents. Corn, soybeans, and winter wheat were all higher early Wednesday, supported by weather concerns that are becoming more summer-like. DTN's five-day forecast is mostly dry with hot temperatures coming to the western Plains this weekend.

Other Markets:

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

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Corn:

It is the seventh of June, the time of year when prices are known for perking up and taking a direction. True to form, July corn was up 4 1/4 cents early, pushing its highest price in 12 weeks with concerns about this year's planting problems, lower crop conditions, and dry weather in the Dakotas. DTN's five-day forecast is mostly dry for the Corn Belt with hot temperatures headed to the western Plains this weekend. While corn is facing challenges here in the U.S., Brazil's second crop is said to be doing well and a bigger production estimate for Brazil is probably coming in Friday's WASDE report. Also, Brazil's FOB corn prices have undercut U.S. prices since early May and will soon be taking export business. July corn has been trading sideways since mid-March and is now making an effort to break higher. A close above $3.79 1/2, if it happened, would turn corn's trend 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 0.13 after the Organization for Economic Cooperation and Development estimated world GDP growth at 3.5% in 2017, the largest increase since 2011, reported RTTNews.com.

Soybeans:

July soybeans were up 7 1/2 cents with early signs of commercial buying in both, soybeans and meal. July soybean oil is up just 0.04 after palm oil futures ended down 1.8% overnight. Spring planting problems in corn have been another bearish weight on soybean prices and there is a legitimate concern that USDA's June 30 estimate of soybean acres may come in higher than the March estimate of 89.5 million. If there is no bearish surprise, then prices have a better chance of holding support in the low-$9s as commercials were holding the largest net long position in two years as of May 30 -- a good sign of demand at these lower prices. Early in the growing season, increased soybean supplies are still expected in 2017 and 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 was up 5 1/2 cents early as winter wheat contracts are getting more buying attention now that spring wheat problems are becoming more evident. DTN's five-day forecast is mostly dry for winter wheat areas as early harvest is underway. There is a chance for rain in Montana and North Dakota early next week which will be helpful to spring wheat crops, if the rains come through. Weather markets are notoriously volatile as forecasts adjust from day to day, but there is no argument that July Minneapolis wheat remains in an uptrend for now. Even Chicago and K.C. wheat contracts have left behind higher lows in May and have chances for uptrends to develop as we get closer to learning more from the winter wheat harvest. 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.

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

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Todd Hultman