DTN Before The Bell Grain Comments

Row Crops Starting Higher, Heat On the Way

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
Connect with Todd:
(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

December corn was up 3 cents, November soybeans were up 3 1/2 cents, and September Chicago wheat was down 1 3/4 cents. At 8 a.m. CDT, USDA announced 5.6 million bushels (143,000 mt) of U.S. corn was sold to Mexico, 5.2 million bushels of which was for 2017-18 and the rest for 2016-17. Corn and soybeans were higher early Friday with help from hot temperatures in the seven-day forecast for much of the western Plains and western Midwest. September Minneapolis wheat is up 20 cents with more hot and dry weather expected in the northwestern Plains.

Other Markets:

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

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Corn:

At 8 a.m. CDT, USDA announced 5.6 million bushels (143,000 mt) of U.S. corn was sold to Mexico, 5.2 million bushels of which was for 2017-18 and the rest for 2016-17. December corn was up 3 cents early Friday with a mostly dry weekend expected for the Corn Belt. Friday's new seven-day forecast still expects rain over the eastern Midwest, but the coverage area has retreated for much of the central Midwest with hot temperatures expected up and down the western Plains. Early Friday, USDA said last week's export sales and shipments of corn totaled 5.5 and 43.7 million bushels respectively. It was a new marketing year low for corn sales, but more importantly, total corn shipments are now up a bullish 34% in 2016-17 from a year ago with roughly two months left in the season. December corn continues to trade sideways, limited by the June high of $4.09 while we learn more about this year's crop. 967 July corn contracts were delivered early Friday. DTN's National Corn Index closed at $3.46 Thursday, priced 45 cents below the September contract and near its highest price in a year. In outside markets, the September U.S. dollar index is up 0.18 after the U.S. Labor Department said non-farm payrolls increased 222,000 in June, more than was expected.

Soybeans:

November soybeans were up 3 1/2 cents early Friday, not backing down from its challenge of the $10 mark while crop conditions remain a concern in 2017. As described above, the new seven-day forecast still expects rain in the eastern Midwest, but stays closer to the Great Lakes, offering less moisture to Iowa and Missouri while high temperatures hit the 90s or more in the western Midwest. USDA said last week's export sales and shipments of soybeans totaled 13.4 and 10.2 million bushels respectively, a neutral-to-bearish combination that still has total soybean shipments up 20% in 2016-17 from a year ago. It is important to remember that soybean prices have struggled against a bearish fundamental outlook all year, running into a record harvest from Brazil and record plantings here in the U.S. It is somewhat remarkable that November soybean prices are trading at $10 and credit goes to aggressive world demand and the persistence of crop concerns early in 2017. So far, the trend for November soybeans remains up. Among July contracts, 829 soybeans, 195 soybean meal and 65 soybean oil were delivered early Friday. DTN's National Soybean Index closed at $9.20 Thursday, priced 66 cents below the August contract and at a new three-month high.

Wheat:

September Chicago wheat was down 1 3/4 cents early Friday, still falling back from Wednesday's new one-year high as traders show hesitation about trading at such high prices. That does not mean that drought conditions are getting better in the northwestern Plains as they certainly are not and the next ten days remains hot and dry. USDA will break down its U.S. wheat production estimate by class on Wednesday, July 12 and it should be interesting with the winter wheat harvest expected to be down from a year ago, but not too bad while the spring wheat crop is looking like a disaster. Early Friday, USDA said last week's export sales and shipments of wheat totaled 13.8 and 19.9 million bushels respectively, a neutral combination that has total wheat shipments up 29% from a year ago after one month of business in 2017-18. For now, all three wheats remain in uptrends, but are looking precarious after Thursday's sell-off from significant highs. Among July contracts, 168 Chicago wheat and 350 K.C. wheat were delivered early Friday. DTN's National SRW index closed at $5.07 Thursday, priced 32 cents below the September contract and down from its highest price in nearly two years.

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

Follow Todd on Twitter @ToddHultman1

(BAS)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]

Todd Hultman