DTN Before The Bell Grain Comments

Morning CME Globex Update:

December corn was up 2 1/4 cents, November soybeans were up 3 1/4 cents, and July Minneapolis wheat was up 15 cents. July Minneapolis wheat was up 15 cents at the 7:45 a.m. break after USDA issued its lowest crop rating for spring wheat in over two decades. Corn and soybeans are both modestly higher after USDA showed the lowest crop ratings for both in four years.

Other Markets:

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

Corn:

December corn was up 2 1/4 cents early Tuesday, getting a modest lift after Monday's sell-off with plenty of uncertainty about crop conditions still ahead. Late Monday, USDA said 94% of corn was emerged and 67% was rated either good or excellent, putting DTN's Corn Condition Index at a four-year low of 159. DTN's five-day forecast expects moderate rains over all but the western edge of the Corn Belt and Tuesday's weather map shows rain falling in North Dakota. The rain may not be so welcome in Indiana where 20% of the corn crop is rated poor or very poor after this year's wet spring. In the meantime, Brazil's second corn crop is doing well and will soon be competing for export business. In spite of Monday's sell-off and this week's bearish turn in the forecast, December corn remains in an uptrend. DTN's National Corn Index closed at $3.38 Monday, priced 39 cents below the July contract and at its highest price in eleven months. In outside markets, the June U.S. dollar index is down 0.10 as the Federal Reserve begins its two-day meeting, ending with a rate decision on Wednesday afternoon.

Soybeans:

November soybeans were up 3 1/4 cents early after USDA said 92% of soybeans were planted, 77% were emerged, and 66% were rated good or excellent. DTN's first Soybean Condition Index of 2017 is starting at a four-year low of 162, largely due to a wet spring in the eastern Midwest and dry conditions in the Dakotas. The irony of course, is that we still don't know how many soybean acres we are talking about in 2017 and that remains a bearish concern heading toward USDA's Acreage report on June 30. This week's wetter forecast will mostly miss South Dakota where soybeans' poor-to-very poor ratings are the highest and bring more rain to Indiana where USDA's poorest ratings are the second highest and surplus topsoil moisture was just getting back to more normal levels. There is plenty of uncertainty about the new season ahead and so far, November soybeans remain in a downtrend with increased U.S. soybean supplies expected in 2017-18. DTN's National Soybean Index closed at $8.66 Monday, priced 65 cents below the July contract and near its lowest prices in over a year.

Wheat:

July Minneapolis wheat was up 15 cents at the 7:45 a.m. CDT break, jumping higher after USDA dropped its good-to-excellent crop rating for spring wheat from 55% to 45% late Monday. DTN's Spring Wheat Condition Index now stands at 105, the lowest in over two decades and is also having a bullish influence on Tuesday's winter wheat prices. For winter wheat, USDA said half of the crop was rated good or excellent, resulting in a DTN Winter Wheat Condition Index of 121 which is down from 153 a year ago, but not as bad as the 100 point reading in 2015. 17% of winter wheat has been harvested and Kansas is just getting started with 4% of the harvest in. Even though USDA's estimate of winter wheat production is already down 25% from a year ago, it will be interesting to see if actual harvest is even that good with high poor-to-very poor ratings in South Dakota and Kansas. July Minneapolis wheat prices remain in an uptrend and are near their highest level in two years. July K.C. wheat was up 7 1/2 cents and continues to hold firm within a sideways range while traders wait to hear more about harvest. DTN's National SRW index closed at $4.09 Monday, priced 25 cents below the July contract and down from its highest price in eleven months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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