DTN Closing Grain Comments

Grains Mixed While Forecast Holds Bullish Risk

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn was down 1/4 cent in the September contract and down 1/2 cent in the December. Soybeans were up 4 1/2 cents in the August contract and up 4 cents in the November. Wheat closed up 3 cents in the September Chicago contract, up 1/4 cent in the September Kansas City and down 3/4 cent in the September Minneapolis contract.

The September U.S. dollar index is down 0.30 at 95.47. August gold is up $1.80 at $1,215.00 while September silver is up 14 cents and September copper is up $0.0245. The Dow Jones Industrial Average is up 19 at 21,427. August crude oil is up $0.67 at $45.07. August heating oil is up $0.0208 while August RBOB gasoline is up $0.0193 and August natural gas is up $0.122.

Corn:

December corn closed down a half-cent Tuesday, staying near Monday's new one-year high with plenty of weather risk still in play for the 2017 crop. Late Monday, USDA said 19% of corn was silking, less than the 27% average of the past five years. 6Sixty-five percent of corn was rated good or excellent, resulting in an eight-point drop in DTN's Crop Condition Index to 155, the lowest score in five years. USDA's poor-to-very poor ratings remain high in the Dakotas and Indiana and were also as high as 9% in Illinois and Nebraska. Even though there is a WASDE report Wednesday, the main concern for corn is that the six- to 10-day forecast currently looks hot and dry for the central U.S. just as more corn is getting ready to pollinate. With weather forecasts still offering bullish risk, the trend remains up in December corn, contrary to its usual seasonal tendency. On Tuesday, 526 July corn contracts were delivered. DTN's National Corn Index closed at $3.57 Monday, priced 45 cents below the September contract and at its highest price in a year. In outside markets, the September U.S. dollar index is down 0.30 while most commodities other than softs are trading higher.

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Soybeans:

November soybeans closed up 4 cents Tuesday, shaking off earlier overnight selling while forecasts continue to look hot and dry for the central U.S. next week. Tuesday's map saw rain in Illinois and Indiana with light showers scattered elsewhere. More rain is expected in select areas of the central and eastern Midwest the next two days, followed by drier conditions after Thursday. Late Monday, USDA said 34% of soybeans were blooming and 7% were setting pods, in line with their usual paces. Sixty-two percent of soybeans were rated good or excellent, resulting in a seven-point decline in DTN's Soybean Condition Index to 147, the lowest in five years. Not only did the trend in December soybean meal also turn higher with soybeans last week, but the December/March meal spread is close to posting a bullish inverse -- a sign of bullish commercial demand. December soybean oil is also in a new uptrend, adding to Monday's new three-month high with a 0.15 gain on Tuesday. Among July contracts, 180 soybeans, 181 soybean meal and 43 soybean oil were delivered early Tuesday. DTN's National Soybean Index closed at $9.58 Monday, priced 66 cents below the August contract and at its highest price in four months.

Wheat:

September Chicago wheat closed up 3 cents, unwilling to give back ground while 2017 weather remains hostile to wheat crops, especially in the northwestern U.S. Plains and southern Saskatchewan. Late Monday, USDA dropped its good-to-excellent rating again on spring wheat, now down to 35%. That led to a 21-point drop in DTN's Spring Wheat Condition Index to 44, still the lowest since 1988 as drought conditions in the northwestern Plains continue to intensify. USDA also said 67% of winter wheat was harvested. Illinois and Kansas are nearly finished while the northwestern U.S. is just getting started. Dow Jones' survey expects USDA to estimate 1.26 billion bushels of winter wheat production and 414 million bushels of other spring wheat production in Wednesday's WASDE report, but there could be a surprise, given this year's tough weather conditions. So far, all three wheats remain in uptrends with Minneapolis wheat owning the most bullish fundamental argument. One contract of July Kansas City wheat was delivered early Tuesday and open interest is dangerously low for all three July wheat contracts. DTN's National SRW index closed at $5.17 Monday, priced 33 cents below the September contract and near its highest price in two years. DTN's National HRW index closed at $4.88, near its highest price in two years.

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

Follow him on Twitter @ToddHultman1

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Todd Hultman