DTN Closing Grain Comments

General Comments:

Corn closed up 4 1/2 cents in the July contract and up 4 1/4 cents in the December. Soybeans closed up 4 1/4 cents in the July and up 6 cents in the November. Wheat closed up 11 1/2 cents in the July Chicago, up 8 1/4 cents in the July Kansas City, and up 10 1/4 cents in the July Minneapolis. The June U.S. dollar index is down 0.30 at 97.14. August gold is up $1.20 at $1,255.80 while July silver is down $0.04 and July copper is up 0.0020. The Dow Jones Industrial Average is up 2 at 21,362. August crude oil is up $0.25 at $44.93. August heating oil is up $0.0125, August RBOB gasoline is up $0.0192, and August natural gas is down $0.010.

For the week:

July corn closed down 3 3/4 cents and December closed down 4 cents. July soybeans were down 2 1/2 cents while the November was up 1 3/4 cents. July Chicago wheat was up 19 1/2 cents, July Kansas City wheat was up 22 cents, and July Minneapolis wheat was up 36 1/4 cents.

Corn:

December corn closed up 4 1/4 cents in an otherwise quiet Friday session that saw steady buying. For the week, prices were down 4 cents, held in check by rain in the seven-day forecast. After a jumpy transition to June, the weather pattern is starting to behave more consistently, keeping the best rain chances in the eastern half of the U.S. and just far enough west to include Iowa and Missouri. The dry Dakotas remain this year's trouble spot, but did see some light scattered showers on Friday. Brazil's record corn production will be a bearish source of competition this summer, but overall demand for corn has been good and there should be enough for everyone as USDA conservatively predicts a 1.2 billion bushel drawdown in world ending corn stocks for 2017-18. With U.S. corn shipments up 40% in 2016-17 from a year ago, corn deserves lower U.S. ending stocks estimates, but so far, USDA has refused to budge. Early Friday, USDA announced 4.7 million bushels (120,000 mt) of new-crop corn was sold to Mexico. In spite of this week's wetter forecast, December corn survived a volatile week of trading and remains in an uptrend, still above last week's breakout level. 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 0.30 after the U.S. Commerce Department reported U.S. housing starts down 5.5% in May.

Soybeans:

November soybeans finished up 6 cents Friday and were slightly higher on the week, not a bad performance considering the consistent showing of rain in the forecast for the central and eastern Midwest. The Dakotas remain dangerously dry and there are still pockets of other abnormally dry areas where actual rainfall has been lighter than anticipated. One improvement in the 10-day forecast which will help crop conditions is the lack of extreme heat across the central and eastern Midwest. So far, soybean yields are not likely to match last year's 52.1 bushels an acre, but could still be above USDA's 48.0 bushel estimate, depending on how the rest of the season goes. The immediate bearish concern is the possibility of higher-than-expected soybean plantings in USDA's Acreage report on June 30. If soybeans can survive that day without a bearish surprise, November prices will be more likely to hold support here in the low $9s where commercial buying has shown good demand. 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 closed higher Friday and were also higher on the week, supported by dry conditions in the Northern Plains and the anticipation of lower U.S. wheat production in 2017. July Chicago wheat closed up 11 1/2 cents at its highest close in three months, no doubt prying bearish noncommercials out of their short obligations with bullish concerns active at harvest time. This year's winter wheat crop was 9% smaller at planting and has been through numerous attacks from weather and disease. Early harvest reports from south-central Kansas have been generally favorable, but problems with freeze damage, hail, and mosaic virus have already been noted. Outside of North America, the main wheat regions are doing well, but here in the U.S., production will be significantly lower in 2017 and it is clear that all three wheats are now trending higher. DTN's National SRW index closed at $4.30 Thursday, priced 24 cents below the July contract and at its highest price in 11 months. DTN's National HRW index closed at $3.97, 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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