DTN Before The Bell Grain Comments

Grains Lower Before The Bell, Temperatures Still Hot As ...

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN photo by Greg Horstmeier)

Morning CME Globex Update:

Corn and soybeans were starting lower early, even though Friday's temperatures are expected to live up to their high expectations across the central and western Plains. Friday morning showers in the northwestern Midwest are offering some help to row crops.

Other Markets:

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

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Corn:

December corn was down 6 1/4 cents early Friday with scattered showers from eastern South Dakota to Indiana, catching parts of southern Minnesota and Iowa along the way. As expected all week, Friday will be a hot day across the central Midwest with triple-digit temperatures in the western Plains. There is no question that this week's weather has been stressful to crops and that is the main concern these days. However, the inability of prices to break new highs suggests that there is a limit to this summer's bullish reaction and the other concern is that this is the time of year when prices typically decline toward harvest. So far, December corn remains in a volatile sideways range and is struggling to trade above $4.00. DTN's National Corn Index closed at $3.47 Thursday, priced 44 cents below the September contract and back near its highest prices in a year. In outside markets, the September U.S. dollar index is down 0.19 at its lowest spot price in over a year.

Soybeans:

November soybeans were down 7 3/4 cents early Friday, staying shy of last week's high at $10.47 even though this week's hot weather has been stressful to crops, especially in the many areas missed by rain. The seven-day forecast expects heavy rain amounts in southern Minnesota and Wisconsin with a broader coverage of moderate amounts, mostly over the eastern Midwest. That is bad news for crops in Ohio where fields are already too wet and in the western Midwest where fields are too dry. Unlike corn, the trend in soybeans is up, but it is also fair to wonder if the inability of prices to make a new high this week points to an assertion of soybeans' seasonal tendency to trade lower toward harvest. So far, the trend remains up, but upward momentum shows signs of declining. DTN's National Soybean Index closed at $9.49 Thursday, priced 64 cents below the August contract and near its highest prices in four months.

Wheat:

September K.C. wheat was down just a penny early as winter wheat prices may be finding support at $5.00. Southeastern South Dakota is getting rain Friday morning, but the rest of the northwestern Plains remains disastrously dry with no significant precipitation expected the next two weeks. Normally, that kind of talk would send wheat prices higher, but the market has heard the same tune for so long that prices have lost their ability to respond -- at least for now. Outside of North America, there is a lot of talk about Australia's crop falling to the low 20s (mmt) in 2017-18, but the rest of the world's wheat conditions are generally favorable. One other positive factor for U.S. wheat prices lately has been the rapid pace of export shipments, starting 2017-18 up 33% from a year ago with help from a U.S. dollar trading at its lowest prices in a year. The trends remain up for all three wheats, but prices are not challenging new highs on the same old news. DTN's National SRW index closed at $4.74 Thursday, priced 32 cents below the September contract and down from its highest price in two years.

ToddHultmancan be reached at todd.hultman@dtn.com

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Todd Hultman