DTN Early Word Grains

6:00 a.m. CME Globex:

December corn was down 2 3/4 cents, November soybeans were down 13 3/4 cents, and September K.C. wheat was down 1/4 cent.

CME Globex Recap:

Soybeans are lower early Tuesday after USDA showed slight improvement in the latest crop ratings and Tuesday's forecasts showed chances for broader rain coverage across the Midwest. Corn and wheat were a little lower -- both trading near previous lows where prices may be finding support. The September U.S. dollar index is up 0.14 in spite of news that real GDP in the European Union expanded 2.1% in the second quarter from a year ago, a modest improvement from the first quarter. Most stock markets are higher overnight.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 60.81 points (0.3%) higher at 21,891.12, the NASDAQ Composite lost 26.56 points (-0.4%) to 6,348.12, and the S&P 500 dipped 1.80 points (-0.1%) to 2,470.30 on Monday. DJIA futures were 108 points higher early Tuesday morning. Asian markets were trading higher with Japan's Nikkei up 60.61 points (0.3%), Hong Kong's Hang Seng up 216.24 points (0.8%), and China's Shanghai Composite up 19.61 points (0.6%). European markets were also higher with London's FTSE 100 up 55.58 points (0.75%), Germany's DAX up 50.70 points (0.4%), and France's CAC 40 up 27.10 points (0.5%). The euro was 0.0014 lower at 1.1846 while the U.S. dollar index was up 0.06 to 92.90. September 30-year T-Bonds were up 5/32 at 153'04 while December gold was up $0.40 at $1,273.80. Crude oil was $0.09 higher at $50.26 while Brent crude was down $0.01 at $52.71. China's Dalian soybeans were steady and Malaysian palm oil futures were down .8% overnight.

	BULL		BEAR
1)	So far, December corn continues to hold above support at $3.75.	1)	The latest seven-day forecast expects a broad coverage of rain over the eastern two-thirds of the U.S., including most of the Corn Belt.
2)	DTN crop condition indices for corn and soybeans are still their lowest in five years.	2)	The old-saying of "Soybeans are made in August" could come into play with rain and more moderate temps forecast for this week.
3)	The short-term downtrend in winter wheat may be nearing support levels.	3)	The wheat complex remains vulnerable to renewed commercial selling in Minneapolis spring wheat.

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MORE COMMODITY-SPECIFIC COMMENTS

CORN December corn was down 2 3/4 cents early Tuesday, getting a little support from another week of lower crop ratings from USDA, but still under pressure from this week's wetter forecast. Late Monday, USDA said 85% of corn was silking and 23% was in the dough stage, both a little lower than their five-year averages. 62% of corn was rated good-to-excellent, taking DTN's Corn Condition Index down 3 points to 144 which is still the lowest in five years. For both corn and soybeans, poor-to-very poor ratings increased over the past week in the Dakotas and Iowa, but this week's slightly lower crop ratings for corn could be erased if rain amounts come through as shown in the latest seven-day forecast. While traders wait to hear USDA's first field-based yield estimate on Aug. 10, December corn continues to hold above support at $3.75.

SOYBEANS November soybeans were down 13 3/4 cents early, hit by both barrels of slightly higher crop ratings from USDA and a broader coverage of rain expected in the latest seven-day forecast. Late Monday, USDA said 82% of soybeans were blooming and 48% were setting pods, close to their five-year averages. The good-to-excellent rating increased two percentage points to 59% and lifted DTN's Soybean Condition Index 4 points to 139. Based on poor-to-very poor ratings, slight improvements in crops were seen in Indiana, Illinois, Ohio, and Nebraska while the Dakotas and Iowa showed slight decline from the previous week. In the case of soybeans, the increased chances for rain next week is especially bearish, coming at a time when many soybeans are approaching the pod-setting stage. Of course, the market will be watching to see if rain amounts actually show up, but in the meantime, November soybeans are holding above support at $9.80. Among August contracts, there were 715 deliveries of soybeans, 178 deliveries of meal, and 838 deliveries of soybean oil early Tuesday.

WHEAT September K.C. wheat was down 1/4 cent early Tuesday, possibly finding support near its lowest prices in six weeks. USDA's Crop Progress report said 84% of winter wheat was harvested with progress still taking place from Montana to Washington. 9% of spring wheat was harvested, even with a year ago and it was no surprise that the good-to-excellent rating for spring wheat fell from 33% to 31%. K.C. wheat prices have come down roughly a dollar the past four weeks and noncommercials are likely feeling pressure to liquidate. On the other hand, the six week low at $4.70 may be low enough to provide support, at least until we learn more about the size of this year's wheat crop. The stronger bullish argument continues to be found in Minneapolis wheat where the September contract is up 6 1/4 cents early, but prices haven't responded to worsening drought conditions in four weeks.

DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.28	-$0.03	-$0.43	Sep	$0.001
Soybeans:	$9.35	-$0.05	-$0.72	Nov	$0.009
SRW Wheat:	$4.45	-$0.05	-$0.29	Sep	$0.015
HRW Wheat:	$4.10	-$0.05	-$0.65	Sep	$0.010
HRS Wheat:	$6.91	-$0.08	-$0.40	Sep	$0.010

Todd Hultman can be reached at todd.hultman@dtn.com

Todd can be followed on Twitter @ToddHultman1

(KA)

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