DTN Closing Grain Comments

Row Crops End Lower With Milder Temperatures

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

General Comments:

Corn was down 2 1/2 cents in the September contract and down 2 3/4 cents in the December. Soybeans were down 11 1/2 cents in the August contract and down 12 1/4 cents in the November. Wheat closed down 10 1/2 cents in the September Chicago contract, down 8 1/2 cents in the September Kansas City, and down 13 1/2 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.15 at 93.83. August gold is down $0.30 at $1,254.60 while September silver is down 1 cent and September copper is up $0.0180. The Dow Jones Industrial Average is down 46 at 21,534. September crude oil is up $0.56 at $46.33. September heating oil is up $0.0036 while September RBOB gasoline is down $0.0020 and September natural gas is down $0.085.

Corn:

December corn closed down 2 3/4 cents Monday, a fairly firm close in the face of a pleasant forecast for much of the Midwest with milder summer temperatures and chances for rain over much of the central and Eastern Corn Belt. Given the way this summer has gone, the rain coverage will have to prove itself, but this week's less-hot temperatures are clearly a favorable change for stressed crops. Monday afternoon's crop ratings from USDA will be widely watched and are likely to be lower, but it will be a coin toss to see if corn prices get overruled by this week's more bearish forecast. On the demand side, USDA said last week's corn inspections totaled 36.8 million bushels, lower than the previous week and last year, but still bullish enough to put total inspections up 33% in 2016-17 from a year ago with less than six weeks remaining. USDA also said 5.3 mb (135,000 metric tons) of new-crop U.S. corn were sold to unknown destinations. Friday's CFTC data showed noncommercials still bullish in corn with 177,147 net longs as of July 18. With the 2017 corn crop still encountering weather challenges, December corn is trading within a volatile sideways range, staying above support at $3.75. DTN's National Corn Index closed at $3.35 Friday, priced 45 cents below the September contract and down from its highest prices in a year. In outside markets, the September U.S. dollar index is up 0.15, but still near its lowest spot price in a year ahead of Wednesday's Federal Reserve announcement.

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Soybeans:

November soybeans closed down 12 1/4 cents Monday, also pressured by expectations for rain and more moderate summer temperatures the next seven days while more soybeans get closer to the pod-setting stage. As mentioned above, rain is expected to cover the eastern half of the U.S., possibly reaching as far west as eastern South Dakota. Crop conditions will continue to be poor in the Dakotas and parts of Nebraska, but if the forecast holds true, the rest of the Midwest will get a well-timed drink with apologies to Ohio where fields are too wet. Soybean prices have a bullish pace of export demand going for them and on that front, USDA said 21.9 mb were inspected for export last week, keeping total inspections up 17% in 2016-17 from a year ago and above USDA's estimated pace. It is not yet clear how well 2017 soybean yields will stand up to past years, but so far, the trend of November soybean prices remains up while we learn more about this crop. DTN's National Soybean Index closed at $9.46 Friday, priced 63 cents below the August contract and near its highest prices in four months.

Wheat:

September Chicago wheat ended down 10 1/2 cents and September Minneapolis wheat was down 15 1/4 cents Monday, both showing signs of unraveling at least part of the recent rallies in wheat prices. News that Minneapolis wheat closed near its lowest level in three weeks will strike many as confusing as the forecast for the northwestern Plains is no wetter than it has been and wildfires are a serious concern in Montana. The decline however, is more apt to be related to buyer fatigue after the one-way buying that peaked spring wheat prices on July 5. Monday morning, USDA said 16.6 mb of wheat were inspected for export last week, a lower amount than the previous week and previous year, but still enough to have total inspections up 19% in 2017-18 from a year ago. Friday's CFTC data showed noncommercials still lightly bullish in Chicago wheat with 22,182 net longs as of July 18, even though September prices continue to fall back from their July 5 high. With the contrast of wheat weather problems in North America and Australia versus fairly good reports everywhere else, all three wheat prices are falling back from their recent uptrends. DTN's National SRW index closed at $4.68 Friday, priced 31 cents below the September contract and down from its highest price in two years. DTN's National HRW index closed at $4.29, also 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