DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced nearly 4.0 million bushels (100,000 mt) of U.S. corn were sold to Colombia for 2017-18. November soybeans were starting lower Tuesday, pressured by a broad coverage of rain expected in the seven-day forecast just as more soybeans are approaching their pod-setting stage.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced nearly 4.0 million bushels (100,000 mt) of U.S. corn were sold to Colombia for 2017-18. Before the sale, December corn was down 2 cents at the break, pressured by increased chances for a broader coverage of rain the next seven days. Forecast amounts are always suspect, but the heaviest rains are expected in the southwestern Plains and across the northern Midwest with light to moderate amounts over the rest of the Corn Belt. If the forecast proves true, it will offer crops timely benefit, but we all know that actual outcomes can differ and this year in particular, a wide variety of conditions can be seen in the same states. Late Monday, USDA said 85% of corn was silking and 23% was in the dough stage, on an acceptable pace. The 3 point drop in DTN's Corn Condition Index to 144 meant that the 2017 crop has the sixth lowest crop rating since 2000, similar to 2011. Given this year's wide variation of crop conditions, USDA's field-based survey yield estimate on Aug. 10 will be widely watched and may be a price-mover. Until then, December corn continues to trade within a sideways range, holding above $3.75. DTN's National Corn Index closed at $3.28 Monday, priced 43 cents below the September contract and maintaining a sideways range so far in 2017. In outside markets, the September U.S. dollar index is up 0.14 even though the European Union showed a slightly higher pace of growth in the second quarter.

Soybeans:

November soybeans were down 14 3/4 cents early, hit by Monday's slightly higher crop rating from USDA and additional rain amounts added to the seven-day forecast. USDA said 82% of soybeans are blooming and 48% are setting pods, putting them at an increasingly critical time for rains to make a difference. Forecasts have been extra hard to pin down since June and the current five-day forecast expects the heaviest rain amounts in the southwestern Plains and across the northern Midwest. The rest of the Midwest is expecting light to moderate amounts and this is the time of year when it will matter if an area gets an inch or a tenth. The one consistent feature of the latest forecasts is that temperatures are expected to stay mild and that is beneficial for crops. With plenty of questions still unanswered in 2017, November soybeans continue to fall back from their July high, struggling to hold an uptrend. DTN's National Soybean Index closed at $9.35 Monday, priced 72 cents below the November contract and down from its highest prices in four months. Among August contracts, there were 715 deliveries of soybeans, 178 deliveries of meal, and 838 deliveries of soybean oil early Tuesday.

Wheat:

September Chicago wheat was up a half-cent early, possibly finding support near its lowest prices in six weeks. Late Monday, USDA said 88% of winter wheat was harvested and with work done in the South, this week's rain across the southern Plains will be seen as helpful to moisture levels for the fall planting of winter wheat. USDA also said 9% of spring wheat was harvested, including nearly half of South Dakota where 75% of the crop was rated either poor or very poor. Drought in the northwestern Plains continues to be the main story of 2017 and while September Minneapolis wheat is up 3 1/2 cents early Tuesday, prices have not responded to reports of worsening drought for the past four weeks (see Tuesday's DTN article, "Wheat Prices Fall As Drought Worsens"). With U.S. ending wheat stocks set to drop in 2017-18, winter wheat prices should be finding support soon -- possibly here near their six week lows. DTN's National SRW index closed at $4.45 Monday, priced 29 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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