DTN Closing Grain Comments

Corn Sags Lower With Scattered Showers

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 4 cents in the July contract and down 3 1/2 cents in the December. Soybeans were down 3/4 cent in the July contract and unchanged in the November. Wheat closed down 2 cents in the July Chicago contract, up 1/2 cent in the July Kansas City, and down 1/2 cent in the July Minneapolis contract. The June U.S. dollar index is down 0.06 at 96.88 even though the Federal Reserve went ahead and raised the federal funds rate a quarter-percent, as was expected. June U.S. T-bonds are up 1 15/32nds after the Fed said it expects annual inflation to remain "somewhat below 2% in the near term..." August gold is up $0.50 at $1,269.10 while July silver is up 37 cents and July copper is down $0.0285. The Dow Jones Industrial Average is up 23 at 21,351. July crude oil is down $1.72 at $44.74. July heating oil is down $0.0379 while July RBOB gasoline is down $0.0677 and July natural gas is down $0.032.

Corn:

December corn closed down 3 1/2 cents Wednesday in a quieter day of trading as showers fell around the central and eastern Midwest with milder summer temperatures across the northern Midwest. The seven-day forecast splits the country in two with rain on the eastern half while the Dakotas and western U.S. stay mostly dry. Temperatures will also be hotter on Thursday with mid-90s expected across the central Midwest. Earlier Wednesday, the U.S. Energy Department said ethanol production inched up from 999,000 to 1,002,000 barrels per day last week while ethanol inventory increased from 22.0 million to 22.5 million barrels -- still a supportive level of activity for corn prices. Harvest activity has begun in Brazil, but so far, FOB U.S. corn prices remain close enough to Brazil to keep earning export business. This week's wetter forecast has dampened the bullishness of last week's breakout, but the trend in December corn still remains up. DTN's National Corn Index closed at $3.42 Tuesday, priced 39 cents below the July contract and near its highest price in 11 months.

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In outside markets, the June U.S. dollar index is down 0.06 even though the Federal Reserve went ahead and raised the federal funds rate a quarter-percent, as was expected. June U.S. T-bonds are up 1 15/32nds after the Fed said it expects annual inflation to remain "somewhat below 2% in the near term..." July crude oil is down $1.72 after the U.S. Energy Department said crude oil inventory was down 1.7 million barrels last week, a smaller drop than was expected.

Soybeans:

November soybeans finished unchanged in quiet trading Wednesday, not venturing far while traders keep an eye on changing forecasts. Rain expected in the seven-day forecast from Iowa and Missouri eastward will be mostly helpful to crops and will also help to ease the stress of temperatures in the 90s. The Dakotas and western Plains, however, continue to suffer dry conditions with South Dakota showing the highest poor-to-very-poor crop rating. As challenging as this year's wet spring was for corn, soybean planting was able to benefit from the drier weather that followed and now faces bearish risk that USDA's Acreage report on June 30 may estimate more planted acres than the 89.5 million that USDA estimated in March. Until we get past that report, November soybean prices are likely to have difficulty trading higher and remain in a downtrend. DTN's National Soybean Index closed at $8.68 Tuesday, priced 65 cents below the July contract and up from its lowest prices in over a year.

Wheat:

All three July contracts of wheat started the day higher, but by the close, only July K.C. wheat was able to eke out a small gain of a half-cent. Western Montana and the eastern Dakotas did receive some rain over the past 24 hours, but much more is needed and the seven-day forecast is mostly dry for those states. Except for eastern Kansas, the forecast for the southwestern Plains is also mostly dry with hot temperatures for at least the next five days. The heat should not hurt harvest-ready winter wheat, but will stress everything and everyone else in the area. So far, this year's wheat problems have been mainly confined to North Africa, and that explains why Chicago and K.C. wheat contracts remain in a sideways trading range. July Minneapolis wheat, however, remains in an uptrend with active drought concerns in the Northern Plains and aggressive commercial interest for new-crop spring wheat. DTN's National SRW index closed at $4.21 Tuesday, priced 24 cents below the July contract and at its highest price in 11 months. DTN's National HRW index closed at $3.88, also at its highest price in 11 months.

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

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman