DTN Closing Grain Comments

General Comments:

Corn was up 7 1/2 cents in the September contract and up 7 1/4 cents in the December. Soybeans were up 23 cents in the August contract and up 26 cents in the November. Wheat closed up 29 cents in the September Chicago contract, up 30 cents in the September Kansas City, and up 44 1/4 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.52 at 95.94. August gold is down $23.20 at $1,219.10 while September silver is down 53 cents and September copper is down $0.0195. The Dow Jones Industrial Average is up 130 at 21,479. August crude oil is up $.71 at $46.75. August heating oil is up $0.0276 while August RBOB gasoline is up $0.0136 and August natural gas is down $0.058.

Corn:

December corn closed up 7 1/4 cents Monday, influenced by the drought-inspired rally in wheat and also reflecting weather concerns as corn crops approach pollination. In the seven-day forecast, the best chances for rain are the next few days in the southern and eastern Midwest while the northwestern Plains remain dry with hotter temperatures in the Western Corn Belt. The extended forecast is drier for most of the Corn Belt. Friday's CFTC report showed noncommercials slightly bearish in corn, holding 31,008 net shorts as of June 27, but those positions are probably being covered as corn prices are now rising again. Commercials were net long 19,855 contracts, finding values attractive near the mid-$3s and have probably gone neutral by now. On the demand side, USDA said 43.1 million bushels of corn were inspected for export last week, up from the previous week and bullish enough to keep total inspections up 39% in 2016-17 from a year ago. USDA also said 4.5 mb (114,300 metric tons) of U.S. corn were sold to Mexico, 900,000 bushels of which were for 2017-18 and the rest were for the following season. This is normally the time of year when corn prices come under pressure, but weather concerns are keeping December corn prices firmly sideways, so far -- above support at $3.75. USDA's weekly Crop Progress report will be released Wednesday afternoon, after markets return from the July Fourth holiday. DTN's National Corn Index closed at $3.35 Friday, priced 36 cents below the July contract and near the middle of its 2017 range. There were 1,938 contracts of July corn delivered early Monday. In outside markets, the September U.S. dollar index is up 0.52 in spite of a report of strong manufacturing growth in Europe.

Soybeans:

November soybeans closed up 26 cents Monday with short-covering likely after Friday's CFTC report showed just how bearish noncommercials had gotten in soybeans. As of June 17, noncommercial traders were holding 94,540 contracts net short, their largest net short holding on record. Commercials on the other hand, showed 134,427 net longs, their largest long commitment on record. Needless to say, noncommercials are now under pressure to cover those shorts after USDA stuck with its March planting estimate of 89.5 million acres. Weather is also playing a part in the soybean rally with ongoing concerns of worsening drought in the northwestern Plains. Earlier Monday, USDA said 9.8 mb of soybeans were inspected for export last week, bullish enough to keep total inspections up 18% in 2016-17 from a year ago. USDA also said 120,650 mt of soybean meal were sold to Mexico, 92,540 mt of which were for 2017-18. Monday's new higher close turns the trend in November soybeans higher with plenty of uncertainty still ahead this growing season. Monday's close in November soybeans was the highest in over three months and turns the trend up while many questions remain for the growing season ahead. July deliveries totaled 1,045 for soybeans, 22 for soybean meal, and 138 for soybean oil. DTN's National Soybean Index closed at $8.81 Friday, priced 62 cents below the July contract and at a new five-week high.

Wheat:

September K.C. wheat closed up 30 cents Monday, continuing to ride the wave of drought concerns that is severely impacting this year's spring wheat production and catching all wheat production in a year when plantings were the lowest in a century. The Southern Plains is expecting rain the next few days, but the northwestern Plains remains dry with triple-digit temperatures expected in Montana after Tuesday. USDA's next Crop Progress report comes Wednesday afternoon and will likely show another week of lower crop ratings in the western U.S. On the demand side, USDA said 18.6 mb of wheat were inspected for export last week, less than the previous week, but bullish enough to have total inspections up 23% in 2017-18 from a year ago. USDA also said 5.1 million bushels (140,000 mt) of U.S. wheat were sold to unknown for 2017-18, half of which was HRW wheat and half was soft winter white wheat. Friday CFTC report showed noncommercials still a little bearish in Chicago wheat, holding 9,179 net shorts on June 27, just before prices broke higher. Commercials were net long 9,926 contracts before this latest rally. Drought-based rallies like this can be powerful, but keep in mind that wheat production is mostly doing well outside of North America. For now, all three wheats are actively trending higher. Early Monday, July deliveries totaled 253 for Chicago, 709 for K.C., and 86 for Minneapolis. DTN's National SRW index closed at $4.95 Friday, priced 16 cents below the July contract and at its highest price in nearly two years. DTN's National HRW index closed at $4.55, near its highest price in two years.

Have a safe and enjoyable July Fourth!

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

Follow him on Twitter @ToddHultman1

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