DTN Before The Bell Grain Comments

Morning CME Globex Update:

December corn was down 2 cents, November soybeans were up 3 1/2 cents, and September Chicago wheat was down 1 1/4 cents. Grains started lower Sunday evening, but have clawed their way back to mixed at the morning break, helped by ongoing weather concerns and news that China's GDP came in a little stronger than expected.

Other Markets:

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

Corn:

December corn was down 2 cents early Monday, battling back from Sunday evening's 6-cent loss with weather concerns still active. DTN's seven-day forecast expects heavy rain around southern Minnesota and southern Wisconsin, starting on Tuesday. The rain will reach Ohio, but mostly stays away from the rest of the Corn Belt; temperatures are hot in the Western Corn Belt, more moderate in the east. The extended forecast is mostly dry for the Corn Belt with hot temperatures staying on the western side. The immediate bearish hurdle for corn prices is that Friday's Commitments of Traders report showed noncommercials loaded for bull at the top of the market, taking on 175,745 net longs as of July 11. Even so, weather remains the main driver of prices this summer and so far, December corn remains in a sideways range, above support at $3.75. DTN's National Corn Index closed at $3.32 Friday, priced 44 cents below the September contract and back near its lowest price in three months. In outside markets, the September U.S. dollar index is roughly steady early, trading near its lowest spot price in ten months after rate hike arguments were challenged by last week's economic data.

Soybeans:

November soybeans were up 3 1/2 cents early, cautiously maintaining an uptrend while crop conditions remain a concern in 2017. Early morning news from RTTNews.com reported China's GDP was up 6.9% in the second quarter from a year ago. The news was also encouraging to soybean prices as it was slightly higher than expected. As described above, the bulk of this week's rain is expected to stay around southern Minnesota with lighter amounts reaching eastward. The rest of the Midwest, however, will be mostly dry with hot temperatures in the western states. Monday's Crop Progress report may show slightly higher crop ratings after last week's rain worked across the central Midwest, but not all the rains were beneficial as flooding was a problem in the eastern Midwest. Friday's CFTC data showed noncommercials switched from bearish to lightly bullish as of July 11, holding 18,000 net longs in soybeans. Commercials understandably cut back net longs, but it was a bullish surprise that they were still net long with 18,153 contracts while November prices were at $10.43. November prices corrected lower since then, but their trend is still pointed up while we learn more about the 2017 crop. DTN's National Soybean Index closed at $9.24 Friday, priced 65 cents below the August contract and down from its highest price in four months.

Wheat:

September Chicago wheat was down 1 1/4 cents early Monday, taking a cue from corn and also probing for support, as prices have dropped over 60 cents from the high of two weeks ago. Monday's Crop Progress report should show winter wheat harvest starting to make progress in the northwestern U.S., but the main area of concern continues to be the northwestern Plains where drought is firmly entrenched. The eastern Dakotas may see light to moderate rain amounts this week, but obviously much more is needed over a broader area and it is getting too late for some spring wheat areas. Friday's CFTC report showed noncommercials net long 27,438 contracts in Chicago wheat as of July 11, testing the long side of wheat for a second week before last week's sell-off took prices lower. With wheat production looking generally favorable outside of North America, it may be difficult for winter wheat prices to exceed the high of two weeks ago, but so far, all three wheats remain in uptrends. DTN's National SRW index closed at $4.78 Friday, priced 33 cents below the September contract and down from its highest price in two years.

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

Follow Todd on Twitter @ToddHultman1

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