DTN Before The Bell Grain Comments

Morning CME Globex Update:

December corn was up 5 cents, November soybeans were up 7 cents, and September Chicago wheat was up 4 3/4 cents. At 8 a.m. CDT, USDA announced 47.8 million bushels (1.3 mmt) of U.S. soybeans were sold to China for 2017-18. Corn, soybeans, and all three wheats were starting higher early Friday with some traders possibly finding opportunities in Thursday's big losses. The seven-day forecast is mostly dry with hot temperatures expected in the western Midwest.

Other Markets:

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

Corn:

December corn was up a nickel early Friday, a break in the aggressive selling of the past two days while hot temperatures are expected to return to the western Plains and western Midwest the next seven days while the best rain chances are in the southeastern U.S. While this week's rain was helpful to select areas across the central Midwest, the heavier amounts fell in Wisconsin, Michigan, Indiana, and Ohio -- states that already had excess topsoil moisture. So far in 2017, the best crop conditions have been in Iowa and Minnesota while other corn states have issues that are likely to keep the national yield below USDA's current estimate of 170.7 bushels an acre. Of course, the harshest conditions are in the Dakotas with only more heat on the way. On the demand side, FOB corn prices remain 10 cents cheaper at Brazil's ports, tipping business to South America. December corn prices have been especially volatile the past month, but are holding their sideways range so far. 205 July corn contracts were delivered early Friday, the final day of trading for July grain futures. DTN's National Corn Index closed at $3.25 Thursday, priced 45 cents below the September contract and back near its lowest price in three months. In outside markets, the September U.S. dollar index is down 0.38 after the U.S. Labor Department said consumer prices were unchanged in June and up 1.6% from a year ago, staying below the Fed's target. December gold is up $12.00.

Soybeans:

At 8 a.m. CDT, USDA announced 47.8 million bushels (1.3 mmt) of U.S. soybeans were sold to China for 2017-18 -- probably related to Thursday's signing ceremony in Des Moines. November soybeans were up 7 cents early, possibly revealing an excessive response in Thursday's 46 1/2 cent drop. This week's rain did help select areas of the central Midwest, but also brought heavy amounts to areas where rain was not needed, resulting in areas of flooding from northern Illinois to Ohio. Looking ahead, there is not much rain in the seven-day forecast for the Midwest and hotter temperatures in the western Midwest will reach as far east as Illinois at times next week. In spite of this week's rain, soybean crop conditions are probably still their lowest in five years with plenty of uncertainty as to how the rest of the growing season will turn out. Despite Thursday's big drop, the trend in November soybeans remains up -- against soybeans' seasonal tendency with more volatility expected this summer. Among July contracts, 123 soybeans, 49 soybean meal and 88 soybean oil were delivered early Friday. DTN's National Soybean Index closed at $9.10 Thursday, priced 66 cents below the August contract and down from its highest price in four months.

Wheat:

September Chicago wheat was up 5 3/4 cents early, taking a cue from corn's pause after two days of aggressive selling. Intensifying drought in the northwestern Plains continues to be the main concern for this year's wheat prices, winter wheat included. So far, there is no relief in sight with triple-digit temperatures expected to return Friday and stay for several days. Winter wheat prices however, have heard all this before and are showing signs of drought fatigue, having fallen back roughly 50 cents from last week's high. Even though price momentum has turned negative, the overall trend is still pointed higher and lower U.S. wheat production should continue to be a supportive fundamental argument in 2017. Among July contracts, 3 Chicago and 8 K.C. wheat were delivered early Friday, the final day of trading. DTN's National SRW index closed at $4.79 Thursday, 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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