DTN Before The Bell Grain Comments

Morning CME Globex Update:

December corn was down 3/4 cent, November soybeans were up 3 3/4 cents, and July Minneapolis wheat was up 9 3/4 cents. July Minneapolis wheat continues to be the bullish leader among grain contracts, trading up nearly a dime at the morning break even though part of the northern Plains got rain overnight. The U.S. dollar is trading lower ahead of Wednesday's rate decision after U.S. consumer prices showed their second decline in three months.

Other Markets:

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

Corn:

December corn was down 3/4 cent early Wednesday, struggling to climb back from Monday's sell-off and the initial shock of more rain in Monday's seven-day forecast. The latest seven-day forecast splits the country in half with moderate to locally heavy rain amounts east and mostly dry conditions west. The rain will help crops deal with this week's hotter temperatures, but obviously adds to problems of dry conditions in the Dakotas and western Plains. In South America, this week's forecast is mostly dry, helpful for harvest activity. With forecasts changing daily, December corn remains in an uptrend, supported by commercial buying and the anticipation of lower ending corn and wheat supplies in the U.S. in 2017-18. DTN's National Corn Index closed at $3.42 Tuesday, priced 39 cents below the July contract and near its highest price in eleven months. In outside markets, the June U.S. dollar index is down 0.45 after the U.S. Labor Department said consumer prices were down .1% in May, the second decline in three months. The Federal Reserve was expected to raise the federal funds rate target by a quarter-percent on Wednesday afternoon, but now has a more difficult decision to make.

Soybeans:

November soybeans were up 3 3/4 cents, helped by light commercial buying early Wednesday. The seven-day forecast includes rain from Minnesota to Missouri and eastward, but is mostly dry to the west, offering little or no relief to the driest areas around the Dakotas. November soybeans continue to trade in the low $9s where they have active demand and support from commercial net longs, but also remain under bearish pressure from Brazil's competing supplies and the anticipation of record soybean plantings. Weather remains the unknown variable in this year's balance sheet for soybeans and so far, crop condition ratings reveal problems in the Dakotas, Illinois, and Indiana. November soybeans 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 wheats were higher early Wednesday with July Minneapolis wheat leading the way once again, trading up 9 3/4 cents at the morning break. Tuesday's close was a new contract high for July Minneapolis wheat so this is all new ground as the seven-day forecast remains mostly dry for the Dakotas to eastern Oregon. Except for eastern Kansas, the southwestern Plains will also be dry in the week ahead with triple digit temperatures common. Winter wheat ready for harvest will be okay, but conditions will be stressful for other crops, livestock, and everyone else. So far, the bulk of this year's wheat concerns are in North America and that will help bring down excess wheat supplies in the U.S., but winter wheat prices are not getting extra help from significant problems outside the U.S. July Minneapolis wheat remains in an uptrend while July K.C. wheat is up 3 3/4 cents, pushing the higher end of its sideways range. DTN's National SRW index closed at $4.21 Tuesday, priced 24 cents below the July contract and at 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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