DTN Before The Bell Grain Comments

Morning CME Globex Update:

Morning CME Globex Update: A bullish price response on Monday evening has cooled considerably since, but November soybeans are still higher at the morning break, trading up 7 1/2 cents. Corn and wheat are modestly lower with rain in this week's forecast offering hope for better crop conditions.

Other Markets:

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

Corn:

December corn was down 2 3/4 cents early Tuesday, falling back from Monday evening's higher prices, which followed USDA's lower crop ratings on Monday afternoon. USDA said 62% of corn was rated good or excellent, down from 64% a week ago and dropped DTN's Corn Condition Index 5 points to 147, now the seventh lowest rated crop since 2000. Poor-to-very poor ratings remained high in the Dakotas but were 18% in Indiana, 15% in Nebraska, 11% in Illinois and 10% in Ohio. USDA also said 67% of corn was silking and 8% had reached the dough stage. In spite of obvious problems with the corn crop, December corn is staying within its sideways range, and one of the reasons is the expectation of moderate rain amounts across the central and eastern Midwest. After Thursday, the forecast turns drier, but cooler to more moderate temperatures are also expected. December corn continues to trade sideways, above support at $3.75. DTN's National Corn Index closed at $3.33 Monday, 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 down 0.22 as the Federal Reserve begins its two-day meeting. No significant change in monetary policy is expected when the meeting concludes Wednesday.

Soybeans:

November soybeans were holding a 7 1/2 cent gain early Tuesday, down from the 25 1/2 cent gain reached Monday evening after USDA said 57% of the crop was rated good to excellent, down from 61% a week ago. DTN's Soybean Condition Index fell 11 points to 135, the lowest in five years and is the fifth lowest crop rating for this time of year since 2000. The same states that had double-digit, poor-to-very poor ratings for corn were the same for soybeans. Iowa kicked in another 10%. USDA also said 69% of soybeans were blooming and 29% were setting pods. Just as 2017 crop conditions are getting worse, Tuesday's seven-day forecast "promises" rain across the central and eastern Midwest, followed by cooler temperatures, and that is adding to traders' confusion. This year's wide variety of conditions around the central U.S. is not easy to assess and the uncertainty is building tension ahead of what USDA's field surveys will show in its next WASDE report on Aug. 10. With crops at risk in 2017, the trend in November soybeans remains up. 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 was down 3 3/4 cents early, following corn's lead after Monday's Crop Progress report was uneventful for wheat. USDA said 84% of winter wheat was harvested with fields yet to finish 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, its lowest level since 1988. Drought in the northwestern Plains is so well known by now that wheat prices have lost their ability to respond to a weekly repetition of bad news. The Wheat Quality Council's Hard Red Spring Wheat Tour begins next week and no doubt, reports will be grim. So far however, this year's weather problems for wheat remain confined to North America and Australia, while other wheat regions are doing well. With much of the bad news already out, prices continue to fall back against the uptrends in all three wheats. DTN's National SRW index closed at $4.57 Monday, priced 31 cents below the September contract and down from its highest price in two years.

ToddHultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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