DTN Before The Bell Grain Comments

Morning CME Globex Update:

December corn was up 7 cents, November soybeans were up 22 1/2 cents, and September Chicago wheat was up 11 1/2 cents. At 8 a.m. CDT, USDA announced 4.5 million bushels (114,300 mt) of U.S. corn were sold to Mexico, 900,000 bushels of which were for 2017-18. 120,650 mt of soybean meal were sold to Mexico, 92,540 mt of which were for 2017-18. 5.1 million bushels (140,000 mt) of U.S. wheat were sold to unknown for 2017-18, half was HRW wheat and half was soft winter white wheat. Corn, soybeans, and wheat were all starting higher on the first trading day of July, led again by Minneapolis wheat and concerns of drought in the northwestern Plains.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 4.5 million bushels (114,300 mt) of U.S. corn were sold to Mexico, 900,000 bushels of which were for 2017-18. December corn was up 7 cents at the morning break, adding to Friday's big gain with bullish influence still coming from wheat. The weekend was mostly dry with moderate temperatures across the Corn Belt. Moderate to heavy showers are expected in the southern Plains the next few days and in the seven-day forecast, the best rain chances are still over the central and eastern Corn Belt while the northwest Plains remain dry. Friday's CFTC report showed noncommercials slightly bearish in corn, holding 31,008 net shorts as of June 27 -- holdings that are now being stressed by corn's recent gains. Commercials were net long 19,855 contracts, finding values attractive near the mid-$3s, but may be out by now. Monday's session closes early, at 12:05 p.m. CDT for grains and USDA's weekly Crop Progress report will be released Wednesday afternoon, after the July 4th holiday. In the meantime, December corn continues to hold its sideways range with support at $3.75. 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. In outside markets, the September U.S. dollar index is up 0.37 in spite of a report of strong manufacturing growth in Europe.

Soybeans:

At 8 a.m. CDT, USDA announced 120,650 mt of soybean meal were sold to Mexico, 92,540 mt of which were for 2017-18. November soybeans were up 22 1/2 cents earlier, a likely continuation of short-covering that started last week and was encouraged by relief that USDA did not estimate soybean acres any higher than the 89.5 million they started with in March. Friday's CFTC report showed just how bearish noncommercials had gotten in soybeans, holding 94,540 net shorts as of June 27, their largest net short holding on record. Commercials on the other hand, held 134,427 net longs, their largest long commitment on record and a strong vote of confidence from the companies that know the most about soybean demand. With November soybeans now trading above the June high of $9.58 1/4, it is looking likely that Monday's close will turn the trend higher, contrary to soybeans' normal behavior for this time of year. 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:

At 8 a.m. CDT, USDA announced 5.1 million bushels (140,000 mt) of U.S. wheat were sold to unknown for 2017-18, half was HRW wheat and half was soft winter white wheat. September Chicago wheat was up 11 1/2 cents earlier Monday as all three wheats continue to trade higher, led by Monday morning's 33 1/4 cent gain in September Minneapolis wheat. It is an understatement to say that winter wheat prices don't normally go up this much at harvest time, but obviously the drought hurting spring wheat in the northwestern Plains is having a bullish impact on all wheat prices and there is no sign of relief yet in the seven-day forecast. In fact, temperatures in the western Plains are expected to turn hotter this week with triple digits expected in Montana after Tuesday. Friday CFTC report showed noncommercials still a little bearish in Chicago wheat on June 27, holding 9,179 net shorts just before prices broke higher. Commercials were net long 9,926 contracts that have probably been covered by now. Bullish one-way runs like these seen in wheat can become unstable at some point, but so far, all three uptrends are actively pushing higher. 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.

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

Follow Todd on Twitter @ToddHultman1

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