DTN Closing Grain Comments

General Comments:

Corn was down 8 1/2 cents in the September contract and down 8 1/2 cents in the December. Soybeans were down 16 cents in the August contract and down 17 1/4 cents in the November. Wheat closed down 14 3/4 cents in the September Chicago contract, down 14 3/4 cents in the September Kansas City and down 33 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.12 at 93.92. August gold is down $3.10 at $1,251.20 while September silver is up 7 cents and September copper is up $0.1095. The Dow Jones Industrial Average is up 129 at 21,642. September crude oil is up $1.37 at $47.71. September heating oil is up $0.0438 while September RBOB gasoline is up $0.0352 and September natural gas is up $0.043.

Corn:

December corn closed down 8 1/2 cents as bullish hopes from Monday's lower USDA crop ratings were dashed by this week's forecast for rain across the central and eastern Midwest. Late Monday, USDA said 67% of corn was silking and 8% had reached the dough stage. Corn's good-to-excellent rating fell 2 percentage points to 62% and dropped DTN's Corn Condition Index 5 points to 147, now the seventh lowest rated crop since 2000. Poor-to-very poor ratings stayed high in the Dakotas and Indiana, while jumping to 15% in Nebraska and 11% in Illinois. Ohio's wet weather is also a problem, but the greater concern in the next several weeks is likely the western edge of the Corn Belt where rain has been sparse. Rain is expected to target Iowa and southern Minnesota the next two days, followed by drier weather and cooler temperatures after Thursday. With corn crop conditions struggling in 2017, the best December corn can do so far is hold a sideways range (see Tuesday's DTN article, "Sorting Out 2017 Corn Prices"). DTN's National Corn Index closed at $3.33 Monday, priced 45 cents below the September contract and back down from its highest prices in a year. In outside markets, the September U.S. dollar index is down 0.12 as the Federal Reserve began its two-day meeting. No significant change in monetary policy is expected when the meeting concludes Wednesday.

Soybeans:

November soybeans closed down 17 1/4 cents Tuesday and also met with selling in spite of Monday's lower crop ratings. Late Monday, USDA said 69% of soybeans were blooming and 29% were setting pods -- both on their usual paces. Soybeans' good-to-excellent rating of 57% was down from 61% a week ago and sent DTN's Soybean Condition Index down 11 points to 135. That is the fifth lowest index score for this time of year since 2000, and a sign of legitimate problems with double-digit, poor-to-very poor ratings in the Dakotas and Nebraska, and from Iowa to Ohio. This week's rain will should help conditions in Iowa, but not in Ohio where 40% of topsoil already has surplus moisture. With soybeans starting to set pods, the next several weeks will be important, and so far, the forecast looks drier after Thursday. In spite of Tuesday's sell-off, November soybeans remain in an uptrend with 2017 crops at risk. DTN's National Soybean Index closed at $9.35 Monday, priced 63 cents below the August contract and near its highest prices in four months.

Wheat:

September Chicago wheat dropped another 14 3/4 cents Tuesday as buyers that were excited about owning wheat at the end of June can't seem to be found lately. Late Monday, USDA said 84% of winter wheat was harvested with remaining fields mostly in the northwestern U.S. Not surprisingly, 33% of spring wheat was rated good or excellent, keeping DTN's Spring Wheat Condition Index at 37, the lowest level since 1988. Even September Minneapolis wheat was down 33 cents on Tuesday to its lowest close in over three weeks. The Wheat Quality Council's Hard Red Spring Wheat Tour is getting underway, and there is no question that scouts will find this year's crops in rough shape. From the market's viewpoint, however, it is looking increasingly like the excitement of this year's drought rally peaked on July 5. Winter wheat prices are nearing their five-week lows and short-term momentum has clearly been down since early July. DTN's National SRW index closed at $4.57 Monday, priced 31 cents below the September contract and down sharply from its highest price in two years. DTN's National HRW index closed at $4.21, 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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