DTN Early Word Grains

6:00 a.m. CME Globex:

July corn was 3 cents lower, July soybeans were 2 cents lower, and July Kansas City (HRW) wheat was 5 1/4 cents lower.

CME Globex Recap:

Grains were all lower early, ahead of Friday's next round of monthly supply and demand estimates from USDA. Hot temperatures the next several days should keep prices supported, but traders are understandably wary.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 8.84 points higher at 21,182.53, the NASDAQ Composite gained 24.38 points to 6,321.76, and the S&P 500 added 0.65 points to 2,433.79 Thursday. DJIA futures were 20 points higher early Friday morning. Asian markets closed mostly higher with Japan's Nikkei up 104.00 points (0.5%), Hong Kong's Hang Seng down 32.77 points (-.1%), and China's Shanghai Composite adding 8.07 points (0.3%). European markets were trading mostly higher with London's FTSE 100 up 49.38 points, Germany's DAX up 63.00 points (0.5%), and France's CAC 40 gaining 22.26 points (0.4%). The euro was 0.00425 lower at 1.11865 while the U.S. dollar index was 0.15 higher at 97.36. September 30-year T-Bonds were 1/32 higher at 155'19 while August gold lost $3.00 to $1,276.50. Crude oil was $0.21 higher at $45.85 while Brent crude gained $0.22 to $48.07. China's Dalian soybean futures were higher while Malaysian palm oil futures were up .4% overnight.

	BULL		BEAR
1)	Total marketing year export shipments were still bullish for corn.	1)	USDA may increase the estimate of Brazil's corn production in Friday's WASDE report.
2)	Last week's soybean sales were lower for soybeans, but still neutral-to-bullish.	2)	The rally in old-crop soybeans could be dulled by increased commercial selling.
3)	Winter wheat contracts have established new 4-week highs this week, a bullish technical signal.	3)	Another winter wheat harvest weekend is fast approaching, possibly bringing with it increased commercial selling.

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MORE COMMODITY-SPECIFIC COMMENTS

CORN December corn is down 3 cents early, showing some reluctance to trade higher ahead of Friday's WASDE report and ahead of a hot weekend. Traders will be watching to see what USDA says about Brazil's corn production and there is a good chance of at least a modest increase from the current 96.00 mmt estimate. The next few days are expected to be very hot with triple digit temperatures expected in Nebraska and Iowa. Given the brief outcomes of the past two years of weather scares, traders are acting reluctant to get out ahead of this one -- at least so far. December corn prices remain in an uptrend for now.

SOYBEANS November soybeans are down 2 cents early, also pausing ahead of Friday's WASDE report. It is difficult to imagine much in this report that could surprise traders, but a modest increase in USDA's soybean production estimate is possible as USDA is at 111.6 mmt and other estimates have been closer to 113 mmt. November soybeans have had a decent rally this week, thanks to the hotter seven-day forecast ahead. But we can't forget the bearish possibility of record high U.S. plantings this year, possibly even more than USDA's March estimate of 89.5 million acres. And coming after a record Brazilian harvest makes it likely that USDA will again estimate increased U.S. ending soybean stocks for 2017-18. The overall trend in soybeans remains down, but the seasonal tendency is still giving soybeans support while weather concerns are active.

WHEAT July K.C. wheat is down 5 1/4 cents early, pulling back from Thursday's new four-week high as we wait to see USDA's updated estimate of winter wheat production. As much as winter wheat has been through this year with adverse weather and the spread of mosaic virus, a lower production estimate seems reasonable. Spring wheat is also under attack from dry conditions in the northern Plains, but Friday's numbers from USDA are not likely to tell us much about that yet. Outside of North America, wheat regions are not reporting major problems so noncommercials are probably still short in Chicago contracts, but wheat prices do have potential to work higher this year with reduced production here in the U.S. and possibly, Canada. So far, winter wheat is trading in a sideways range with commercials offering support in the low-$4s.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.46	$0.00	-$0.40	Jul	-$0.007
Soybeans:	$8.73	$0.08	-$0.65	Jul	$0.010
SRW Wheat:	$4.20	$0.06	-$0.29	Jul	$0.012
HRW Wheat:	$3.81	$0.09	-$0.73	Jul	$0.012
HRS Wheat:	$5.61	$0.09	-$0.43	Jul	$0.000

Todd Hultmancan be reached at todd.hultman@dtn.com

Toddcan be followed throughout the day at www.twitter.com\ToddHultman1

(KA)

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