DTN Before The Bell Grain Comments

Morning CME Globex Update:

December corn was down 5 1/4 cents, November soybeans were down 8 1/2 cents, and September Chicago wheat was down 5 1/2 cents. Corn, soybeans, and all three wheats were starting lower early Wednesday with USDA's WASDE report set to be released at 11 a.m. CDT. Only minor changes in estimates are likely to provide traders a brief distraction from their focus on this summer's weather.

Other Markets:

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

Corn:

December corn was down 5 1/4 cents early, after a combination of rain and hail fell across Minnesota and Wisconsin, headed for Michigan later Wednesday. There are light scattered showers expected across the central Midwest and also a large region of heat advisories from Kansas to Illinois. The bigger concern for the corn crop is how the forecast turns hot and dry for most of the Corn Belt after Thursday. At 11 a.m. CDT, USDA will release its next round of monthly supply and demand estimates and a small increase in the estimate of U.S. ending corn stocks is expected. Keep in mind that USDA's first field-based estimates don't come out until the August report. In spite of Wednesday's lower start, the trend in December corn remains up with bullish risk in the six to ten day forecast. 440 July corn contracts were delivered early Wednesday. DTN's National Corn Index closed at $3.56 Tuesday, 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 down 0.15 with Federal Reserve Chairman set to speak to Congress on Wednesday and Thursday. Other commodities are mostly higher and stocks are expected to open higher.

Soybeans:

November soybeans were down 8 1/2 cents early Wednesday, pulling back from its highest close in 2017 ahead of USDA's 11 a.m. CDT WASDE report. Dow Jones' survey expects a small reduction in the estimate of U.S. ending soybean stocks, thanks to USDA's finding of lower-than-expected soybean stocks on June 1. This year's higher pace of soybean exports has also been helpful for prices and the fact that prices are near their highest level in 2017 is a testament to how strong world demand is and why this year's uncooperative weather is such a threat. Speaking of weather, the best rain chances in the week ahead fall off after Thursday and remain confined to the eastern Midwest. Next week is expected to be hot and dry across the Midwest, stressful to crops. With weather still presenting a bullish risk, trends are up for November soybeans, December soybean meal, and December soybean oil. Among July contracts, 160 soybeans, 68 soybean meal and 43 soybean oil were delivered early Wednesday. DTN's National Soybean Index closed at $9.63 Tuesday, priced 67 cents below the August contract and at its highest price in four months.

Wheat:

September Chicago wheat was down 5 1/2 cents early, influenced by corn and possibly showing some concern by traders of what USDA will say about winter and spring wheat production in the 11 a.m. CDT WASDE report. Dow Jones' survey expects USDA to estimate 1.26 billion bushels of winter wheat production and 414 million bushels of spring wheat production, but a surprise is possible given this year's weather challenges. It may be getting old to repeat, but there is still no significant precipitation expected in the northwestern Plains with triple digit temperatures expected to return this weekend. It is no surprise by now that all three wheats remain in uptrends with spring wheat still having the most bullish fundamental support. Among July contracts, 38 Chicago and 113 K.C. wheat were delivered early Wednesday. Open interest is dangerously low for all three July wheat contracts. DTN's National SRW index closed at $5.20 Tuesday, priced 33 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

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