DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn and soybeans were steady to lower early Friday with rain gradually leaving the Midwest for what could be at least the next ten days. K.C. wheat prices were higher, finding support near their lowest level in five weeks and getting help from Friday's lower U.S. dollar.

Other Markets:

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

Corn:

December corn was unchanged with scattered showers in Arkansas and Tennessee early Friday while the rest of the Corn Belt is expected to be dry for the next ten days. Highs will be in the 80s across most of the Midwest Friday which offers limited help to crops, but Thursday's U.S. Drought Monitor showed an expanded area of dry conditions in the western and central Corn Belt. On the demand side, this is a slow time for U.S. corn export sales as South America's big harvests hit the market. While this year's crop concerns are helping keep December corn prices supported above their nine-month low at $3.75, slower export demand and bearish seasonal harvest pressure are keeping prices limited to their sideways range. DTN's National Corn Index closed at $3.31 Thursday, priced 43 cents below the September contract and near its lowest prices in 2017. In outside markets, the September U.S. dollar index is down 0.26 after the U.S. Labor Department said the employment cost index was up .5% in the second quarter, a little less than expected. The U.S. Commerce Department estimated real GDP up 2.1% in the second quarter from a year ago, in line with expectations.

Soybeans:

November soybeans were down 3/4 cent early Friday within a narrow range of overnight trading. Temperatures are expected to stay in a moderate range in the week ahead and that should help crops reaching their pod-setting stage, but many areas in the western and central Midwest still need rain and there are no significant amounts expected the next ten days. Surprises are always possible as we have already seen several this year, but this year's lower crop ratings are apt to continue. Unlike corn, U.S. soybean prices are still competitive in the export market, putting soybean exports on track to force an increase USDA's export estimate for 2016-17. With crops at risk and demand doing well, the trend in November soybeans remains up. DTN's National Soybean Index closed at $9.33 Thursday, priced 61 cents below the August contract and down from its highest prices in four months.

Wheat:

September K.C. wheat was up 5 3/4 cents early Friday with prices continuing to find support after testing their five-week low earlier this week. Friday's seven-day forecast remains dry for the northwestern Plains which obviously adds to drought problems, but also allows winter wheat harvest to make progress across the northwestern states. The Wheat Quality Council's Hard Red Spring Wheat tour wrapped up Thursday with a final yield estimate of 38 bushels an acre, down from last year's 45 bushels. Crop conditions for all spring wheat areas are likely worse than the 496 stops the tour calculated, but it is also fair to say that the market has been digesting this news for a long time and there is a good chance prices already peaked on July 5. The new feature of this week's forecast is the expectation for heavy rain amounts on the western edge of the southwestern Plains -- some help for next year's winter wheat crops. While winter wheat prices have fallen back from their highs and are likely headed for sideways trading, the trend is still higher in September Minneapolis wheat, caught in the midst of its worst drought since 1988. DTN's National SRW index closed at $4.48 Thursday, priced 32 cents below the September contract and down sharply from its highest price in two years.

ToddHultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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