DTN Closing Grain Comments

Row Crops Fight Back, Trim Week's Losses

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

General Comments:

Corn closed up 6 1/2 cents in the September contract and up 6 1/2 cents in the December. Soybeans closed up 13 1/2 cents in the August and up 14 cents in the November. Wheat closed down 1 cent in the September Chicago, down 2 cents in the September Kansas City, and up 8 1/2 cents in the September Minneapolis.

The September U.S. dollar index is down 0.59 at 94.92. August gold is up $10.40 at $1,227.70, while September silver is up $0.23 and September copper is up 0.0305. The Dow Jones Industrial Average is up 88 at 21,641. August crude oil is up $0.40 at $46.48. August heating oil is up $0.0194, August RBOB gasoline is up $0.0339, and August natural gas is up $0.026.

For the week: September corn closed down 16 1/4 cents and December closed down 15 1/4 cents. August soybeans were down 12 cents while the November was down 14 cents. September Chicago wheat was down 24 1/4 cents, September Kansas City wheat was down 29 1/2 cents, and September Minneapolis wheat was down 8 3/4 cents.

Corn:

December corn closed up 6 1/2 cents Friday, but was down 15 1/4 cents on the week after prices were hit by rain across the central Midwest, a bearish change in the extended forecast and higher estimates of U.S. ending corn stocks from USDA. USDA's corn production estimates, however, won't be based on field surveys until Aug. 10, and there happens to be several areas of concern for crop conditions this year. The latest seven-day forecast shows a chance for rain in northern Iowa and southern Minnesota next week, but the rest of the Corn Belt remains mostly dry with hot temperatures in the western Midwest, scorching the northwestern Plains. The eastern Midwest will be protected by more moderate temperatures, and recently flooded areas should benefit from the drier forecast. So far, December corn prices continue to hold their sideways range, above support at $3.75 with plenty of weather risk still ahead. 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 0.59 at a new contract low after the U.S. Labor Department said consumer prices were unchanged in June and up 1.6% from a year ago. The University of Michigan later said its index of consumer sentiment came in at a lower-than-expected 93.1 for July.

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Soybeans:

November soybeans closed up 14 cents Friday, taking back some of Thursday's big loss, but still ended down 14 cents on the week. Like corn, soybean prices were hit by this week's rain across the central Midwest and bearish change in the extended forecast. But, unlike corn, USDA's estimate of ending soybean stocks was lowered to 460 million bushels in the new season, thanks to the current season's higher export pace. China added to that this week, committing to 460 million bushels of U.S. soybeans at a signing ceremony in Des Moines. Part of that likely resulted in Friday's USDA announcement that 47.8 million bushels (1.3 mmt) of U.S. soybeans were sold to China for 2017-18. The main concern for soybean prices in mid-July, however, continues to be weather, and there are plenty of unanswered questions still on the table. As described above, the seven-day forecast is mostly dry for the Midwest, except for parts of Iowa and Minnesota. Temperatures will be hot in the western Midwest with the mid-90s reaching into Iowa at times. Technically, the trend in soybeans remains up, even though Thursday's selling turned short-term momentum lower. The uptrend goes against soybeans' seasonal tendency in mid-July, but is being helped by ongoing concerns about weather. 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 ended down a penny Friday and was down 24 1/4 cents on the week, pressured by Wednesday's higher-than-expected estimates of ending wheat stocks from USDA and a certain amount of trader fatigue over continuous reports of hot and dry conditions in the northwestern Plains. Make no mistake, this year's lower wheat production in the U.S. should help all wheat prices hold up better than they did a year ago, but it continues to be spring wheat specifically that get the most bullish support from this year's drought. Outside of North America, there were modest crop estimate reductions in Wednesday's USDA report for Australia, Europe, China and Ukraine, but also a 3-mmt increase for Russia. So wheat prices are not getting much outside help from other problems. Technically, the trends in all three wheats remain up, but upward momentum in winter wheat contracts suffered a blow this week. Minneapolis wheat continues to have the most bullish fundamental argument and is holding up the best, technically. 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. DTN's National HRW index closed at $4.47, down from 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