DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn, soybeans, and wheat were all higher early Wednesday, showing small bounces after Tuesday's selling with slight help from lighter rain amounts in the seven-day forecast for the central Midwest. The September U.S. dollar index is quiet and other commodities are mostly lower early.

Other Markets:

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

Corn:

December corn was up 4 1/4 cents early Wednesday, reacting back from Tuesday's aggressive sell-off and also looking at a new seven-day forecast which keeps the bulk of the week's rains north of Iowa and south of Missouri. The part of the forecast that has been more consistent is the expectation for mild and even cool temperatures to prevail over the Midwest. On the demand side, U.S. export activity has slowed as FOB corn prices currently favor buying from South America. Amid the wide variety of weather factors the corn crop has encountered this summer, December corn continues to trade within its sideways range and is still holding above support at $3.75. DTN's National Corn Index closed at $3.20 Tuesday, priced 42 cents below the September contract and at the low end of its sideways range in 2017. In outside markets, the September U.S. dollar index is off to a quiet start, not flinching after RTTNews.com said ADP reported 178,000 new private sector jobs in July, less than expected.

Soybeans:

November soybeans were up 7 1/2 cents Wednesday, getting an early bounce after Tuesday's 35 1/2 cent sell-off. Prices may also be getting some lift from the lighter rain amounts forecast across the central Midwest, but as we have seen this summer, the devil is in the details and actual rain amounts will be what counts. Lack of extreme heat in the forecast is certainly a benefit for soybean crops in this pod-setting stage, but rain in the drier states is still needed for this year's yields. The good news for U.S. soybeans in 2017 is that world demand is so strong that FOB prices in Brazil are currently higher than at the U.S. Gulf and favor a continued stream of export demand here in the U.S. One warning on trade is that CNBC.com reported that President Trump is preparing to get tougher with China on trade terms -- a sensitive point of concern for the soybean market. Technically, Tuesday's sell-off broke the upward momentum that soybean prices had been showing, but the trend remains up. DTN's National Soybean Index closed at $9.01 Tuesday, priced 70 cents below the November contract and down from its highest prices in four months. Among August contracts, there were 567 deliveries of soybeans, 181 deliveries of meal, and 786 deliveries of soybean oil early Wednesday.

Wheat:

September Chicago wheat was up 4 1/4 cents early Wednesday, another early attempt at bargain-hunting as prices fell to their lowest close in six weeks on Tuesday. As far as the seven-day forecast is concerned, it is one of the more crop-friendly wheat forecasts we have seen this year. The eastern Dakotas are expecting moderate amounts the next few days where wheat crops still have a chance to do well. The Pacific Northwest is enduring extreme heat, but the drier weather favors harvest progress. And moderate to heavy showers across the southern Plains starting this weekend will help conditions ahead of fall planting. Outside of North American and Australia, wheat production is doing well overall and that is keeping U.S. winter wheat prices contained. Of course, spring wheat prices continue to hold up the best where this year's drought has hit crops the hardest, but even those prices have disconnected from drought news the past four weeks. With U.S. wheat production down in 2017, winter wheat prices continue to look for support and should be able to hold well above last year's lows. DTN's National SRW index closed at $4.30 Tuesday, priced 31 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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