DTN Before The Bell Grain Comments

Green Light for Grains Early Friday

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

Morning CME Globex Update:

December corn was up 1 1/4 cents, November soybeans were up 4 1/4 cents, and July K.C. wheat was up 8 1/4 cents. At 8 a.m. CDT, USDA announced 4.7 million bushels (120,000 mt) of new-crop corn was sold to Mexico. Corn, soybeans, and wheat were all higher at the morning break on Friday with July K.C. wheat up 8 1/4 cents, leading the way with extremely hot temperatures expected in the southwestern U.S. Plains.

Other Markets:

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

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Corn:

At 8 a.m. CDT, USDA announced 4.7 million bushels (120,000 mt) of new-crop corn was sold to Mexico. Before the announcement, December corn was up 1 1/4 cents early Friday with scattered showers around Iowa, Illinois, and even western South Dakota. Temperatures are expected to turn hot in the southwestern Plains Friday, but the central and eastern Midwest is expected to stay mostly in the 80s and low-90s, better for corn crop conditions. Corn prices remain fairly stable so far in 2017 with active demand and the anticipation of lower ending corn stocks in 2017-18 providing support. The new U.S. crop still faces challenges after a wet spring and from drought in the Dakotas so the current uptrend still has potential. USDA's Acreage report on June 30 won't include prevented plantings, but will be widely watched and could offer a surprise. Until then, December corn remains in an uptrend while this week's wetter forecasts dampened last week's buying enthusiasm. DTN's National Corn Index closed at $3.41 Thursday, 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 0.11.

Soybeans:

November soybeans were up 4 1/4 cents early with help from early commercial buying in new-crop soybean meal, another sign of active demand at these lower prices. While corn prices fell back this week, soybean prices have held roughly sideways which seems to be evidence of how well soybean demand has done, even in the face of large shipments out of Brazil. USDA's Acreage report on June 30 is the next big test for soybean prices with a chance for more-than-expected soybean acres seen as legitimate bearish risk. If however, prices can survive the report without a surprise, they have a chance of turning the current downtrend sideways, thanks to the eagerness of commercials to own soybeans in the low-$9s. For now, November soybeans remain in a downtrend with traders keeping an eye on weather and waiting for June 30. DTN's National Soybean Index closed at $8.70 Thursday, priced 65 cents below the July contract and up from its lowest prices in over a year.

Wheat:

All three wheats were starting higher Friday with the southwestern U.S. Plains expecting a couple days of extremely hot temperatures. The heat will not be so bad for wheat that is ready to harvest, but will definitely be stressful for livestock and everyone working in it. Cash winter wheat prices are now trading at their highest levels in nearly a year and, even more than the heat, I suspect that problems from this year's numerous weather challenges are being revealed at harvest. Cash spring wheat prices are trading near their highest prices in two years and July Minneapolis wheat is up 8 cents Friday with ongoing concerns about drought in the northern Plains. For the second time in 2017, all three wheats are trending higher, fueled by the anticipation of this year's lower U.S. wheat production. DTN's National SRW index closed at $4.30 Thursday, 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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Todd Hultman