DTN Closing Grain Comments

General Comments:

Corn was down 8 1/4 cents in the September contract and down 8 1/4 cents in the December. Soybeans were down 35 cents in the August contract and down 35 1/2 cents in the November. Wheat closed down 13 1/4 cents in the September Chicago contract, down 9 1/2 cents in the September Kansas City and down 13 1/4 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.11 at 92.83. December gold is up $5.70 at $1,279.10 while September silver is down 4 cents and September copper is down $0.0110. The Dow Jones Industrial Average is up 84 at 21,975. September crude oil is down $1.22 at $48.95. September heating oil is down $0.0283 while September RBOB gasoline is down $0.0200 and September natural gas is up $0.025.

Corn:

December corn closed down 8 1/4 cents Tuesday to a new four-week low, but held above critical technical support at $3.75. Tuesday's selling will be blamed on the latest seven-day forecast, which shows broad rain coverage over the eastern two-thirds of the U.S. The bigger picture is that corn's market clues have been looking more bearish lately and Tuesday's wetter forecast was just one more bearish straw. Previous bearish clues include a failed challenge of the one-year high in December corn, the recent disappearance of commercial support, and corn's strong bearish seasonal tendency as we get closer to harvest -- all of which were mentioned in Monday's closing market video. On the bullish side of the argument, USDA lowered corn's good-to-excellent rating from 63% to 62% late Monday and also reported that nearly 4.0 million bushels (100,000 metric tons) of U.S. corn were sold to Colombia for 2017-18. Seasonally, this is a tough time of year for corn prices, but so far, December corn is holding above important support at $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 0.11 even though the European Union showed a slightly higher pace of growth in the second quarter, up 2.1% from a year ago.

Soybeans:

November soybeans fell 35 1/2 cents Tuesday to its lowest close in four weeks as Tuesday's wetter seven-day forecast arrived just in time to offer benefit to soybean crops starting to set pods. Before Tuesday, soybean prices had been holding their uptrend and even though USDA showed slightly improved soybean crop ratings on Monday afternoon, DTN's Soybean Condition Index still shows this year as the fifth lowest rated soybean crop since 2000. Tuesday's new seven-day forecast on the other hand, expects the most rain in the southwestern Plains and across the northern Midwest. Drier areas of the central and western Midwest should also benefit, if the rains prove out. While the new forecast is clearly bearish and Tuesday's big price drop is a punch in the gut to bullish traders, commercials have been recently supportive of spot soybean prices in the low to mid $9s. Technically, the five-week trend is still up, but Tuesday's new four-week low is a momentum breaker. 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 down 13 1/4 cents Tuesday, falling to its lowest close in six weeks. Part of the selling in wheat was related to corn's decline, but Tuesday's new seven-day forecast is also bearish for the next winter wheat crop, with moderate to heavy rains across the Southern Plains offering help to fall planting conditions. Late Monday, USDA said 88% of winter wheat was harvested with most of the remaining work from Montana to Oregon and Washington where triple-digit temperatures are still being reached. USDA also said 9% of spring wheat was harvested, but there is no good count yet on how many harvested acres spring wheat will see after this year's drought. September Chicago wheat has returned to its lowest prices in six weeks as the market continues to look for support in a year when U.S. wheat production will be significantly lower. DTN's National SRW index closed at $4.45 Monday, priced 29 cents below the September contract and down from its highest price in two years. DTN's National HRW index closed at $4.10, 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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