DTN Early Word Grains

By Darin Newsom
DTN Senior Analyst

6:00 a.m. CME Globex:

December corn was 1 cent higher, November soybeans were unchanged, and July Kansas City (HRW) wheat was 7 cents higher.

CME Globex Recap:

Following NASS' latest weekly crop condition numbers released Monday afternoon, spring wheat was jolted back to life overnight. Corn never traded lower despite a slight uptick in its condition ratings, while soybeans regained what was lost late in Monday's session. Traders seem to have quickly moved on from condition data, except for spring wheat, and back to focusing on weather maps.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 144.71 points (0.7%) higher at 21,528.99, the NASDAQ Composite gained 87.25 points (1.4%) to 6,239.01, and the S&P 500 added 20.31 points (0.8%) to 2,453.46 Monday. DJIA futures were 11 points higher early Tuesday morning. Asian markets closed mostly lower with Japan's Nikkei up 162.66 points (0.8%), Hong Kong's Hang Seng losing 81.51 points (0.3%), and China's Shanghai Composite off 4.36 points (0.1%). European markets were trading mostly higher with London's FTSE 100 up 4.14 points, Germany's DAX gaining 40.21 points (0.3%), and France's CAC 40 adding 19.13 points (0.4%). The euro was 0.0016 higher at 1.1165 while the U.S. dollar index was 0.02 lower at 97.50. September 30-year T-Bonds were 12/32 higher at 155'26 while August gold rallied $1.70 to $1,248.50. Crude oil was $0.63 lower at $43.57 while Brent crude lost $0.65 to $46.26. China's Dalian soybean and Malaysian palm oil futures were both lower overnight.

	BULL		BEAR
1)	Tuesday morning weather maps show little to no rain for most of the U.S. corn growing areas the past 24 hours.	1)	This week's forecasts for much of the U.S. Midwest continue to call for more favorable corn growing conditions.
2)	Export demand for U.S. soybean supplies continue to outpace USDA's June projection.	2)	Commercial selling could reemerge in new-crop soybeans.
3)	Spring wheat weekly crop condition ratings saw another dramatic drop as of Sunday, June 18.	3)	Winter wheat harvest continues to run slightly ahead of the 5-year average pace.

The weekly Newsom on the Market column can be found on subscription sites only. On DTN Pro it is in News/Town Hall and on MyDTN in News/Columns.

MORE COMMODITY-SPECIFIC COMMENTS

CORN Data released in NASS' Monday afternoon weekly Crop Condition report resulted in a DTN Crop Condition Index rating of 161 points, up 2 points from the previous week. Through the first four weeks of releases, 2017 conditions continue to resemble those seen in 2013 when the national average crop yield ultimately came in almost exactly at DTN's estimated trendline yield of 157.6 bpa. DTN's trendline estimate for 2017 is 166.3 bpa. Given that USDA's projected yield remains at 170.7 bpa, it's easier to see why corn was able to post a slight rally overnight into Tuesday morning. Technically new-crop December corn is still in a minor (short-term) downtrend, testing support near $3.93 3/4 with next support down at $3.90. Given the momentum of the market it would not be surprising to see an extension of the downtrend to next support, maybe not Tuesday but possibly Wednesday. Traders will turn their attention back to morning weather maps that show little to no rain over the bulk of the U.S. growing area the last 24 hours.

SOYBEANS Soybeans traded either side of unchanged overnight, with contracts showing small gains early Tuesday morning. Data from NASS' weekly Crop Condition Report resulted in a DTN Crop Condition Index rating of 161 points, down 1 point from the previous week. With this being only the second set of weekly numbers it is too early to make a projection on yield, though like corn this year's soybean ratings are tracking with what was seen in 2013. Then the crop finished with a national average yield of 44 bpa, as compared to USDA's current projection for this year's crop of 48 bpa. Technically November soybeans appear to be at a crossroads with its minor (short-term) uptrend looking to have nearly run its course, unable to break resistance at $9.61. On the other hand, the secondary (intermediate-term) uptrend on its weekly chart seems to be slowly gaining momentum.

WHEAT Winter wheat had its turn on the track Monday, but wound up dropping the baton with a lower close. Minneapolis spring wheat jumped back into action after a second consecutive sharp decrease in NASS' weekly crop conditions, with new-crop September rallying as much as 18 cents. Data in NASS' weekly report resulted in a DTN Crop Condition Index rating for spring wheat of 84 points, down 21 points from the previous week. As for similar years, one has to go back almost 30 crops to find a spring wheat crop in this poor of condition. Technically next major (long-term) resistance is up at $6.93 1/4 on the market's monthly chart. As for winter wheat markets, both July Kansas City and Chicago remain in uptrends on their respective weekly charts despite ongoing harvest. NASS' weekly crop progress results showed harvest reaching 28% completed nationally with Kansas at 22%, Oklahoma 77%, and Texas 74%. For the SRW crop, Illinois was pegged at 65% completed as compared to the 5-year average of 24%.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.46	$0.05	-$0.38	Jul	$0.003
Soybeans:	$8.75	$0.05	-$0.64	Jul	$0.004
SRW Wheat:	$4.42	$0.12	-$0.23	Jul	$0.007
HRW Wheat:	$4.07	$0.10	-$0.66	Jul	$0.021
HRS Wheat:	$6.01	$0.11	-$0.42	Jul	$0.006

Darin Newsom can be reached at darin.newsom@dtn.com

Darin can be followed throughout the day at www.twitter.com\DarinNewsom

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