DTN Before The Bell Grain Comments

Morning CME Globex Update:

December corn was up 2 1/2 cents, November soybeans were up 6 1/4 cents, and July K.C. wheat was down 7 cents. At 8 a.m. CDT, USDA announced 4.0 million bushels (110,000 mt) of soybeans were sold to Bangladesh for 2016-17. Corn and soybeans were starting the week moderately higher, but adding to those gains may be difficult with more rain in the seven-day forecast and a potentially explosive pair of reports due out from USDA on Friday.

Other Markets:

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

Corn:

December corn was up 2 1/2 cents early Monday with scattered showers in the central Midwest and more rain expected over most of the Midwest the next seven days. Heavy rain amounts may be a concern around northern Missouri and northern Illinois, but the overall forecast will likely be treated as bearish for row crops with temperatures staying moderate. On the other hand, corn got a little bullish news late Friday when USDA said June 1 cattle on feed totaled 11.1 million head, more than was expected and up 2.7% from a year ago. Friday's CFTC data showed noncommercials less bullish about corn, taking net longs from 85,258 to 41,900 on June 20 as prices fell lower. More liquidation likely occurred after December corn fell to a new 2017 low. There are pockets of problems in the Corn Belt this year, but so far, they are being ignored while the seven-day forecast continues to look generally favorable and has turned the trend in December corn down. DTN's National Corn Index closed at $3.19 Friday, priced 38 cents below the July contract and at its lowest price in twelve weeks. In outside markets, August gold is down $11.40, under bearish pressure at a time when the Fed continues to gradually hike interest rates.

Soybeans:

At 8 a.m. CDT, USDA announced 4.0 million bushels (110,000 mt) of soybeans were sold to Bangladesh for 2016-17. Earlier, November soybeans were up 6 1/4 cents Monday, helped partly by early commercial buying in response to the lowest prices in nine months. Friday's CFTC report showed commercials increased net longs to 93,845 on June 20, a source of much-needed support while the anticipation of increased supplies in 2017 keeps pushing prices lower. Noncommercials remain bearish in soybeans, increasing net shorts from 45,956 to 50,490. This week's forecast is generally favorable for row crops with rain expected over most of the Midwest and temperatures staying moderate. Friday's USDA reports are a big concern for soybeans and have the potential to either add to the downtrend or offer prices support. So far, soybeans remain in a downtrend and are apt to trade cautiously this week, ahead of Friday's reports. DTN's National Soybean Index closed at $8.40 Friday, priced 64 cents below the July contract and at its lowest price in over a year.

Wheat:

July Chicago and K.C. wheat were both lower early Monday, pressured by commercial selling with a few more days of favorable harvest weather before rains return later this week. Prices are falling back from last week's new three-month highs, finding it difficult to extend a rally while the rest of the world's wheat regions are doing well. Friday's CFTC data showed noncommercials covered all but 11,083 net shorts in Chicago wheat as of June 20, down from 60,516 the previous week as July Chicago wheat jumped to its highest price in three months. As usual, commercials took advantage of wheat's rally and reduced net longs from 58,560 to 11,743. All three wheats remain in uptrends, but it is Minneapolis wheat that keeps pushing higher, trading up 7 1/4 cents early Monday in the July contract. DTN's National SRW index closed at $4.40 Friday, priced 20 cents below the July contract and down from its highest price in a year.

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

Follow Todd on Twitter @ToddHultman1

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