DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn, soybeans, and wheat were all starting a little higher early Friday, a bargain-hunting response at the end of a down week for grains. Friday will be mostly dry across the Midwest with rain expected across the southern Plains the next five days.

Other Markets:

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

Corn:

December corn was up 3 cents early Friday with a little rain in Wisconsin and northern Ohio, but mostly dry conditions across the Corn Belt and many waking to a fresh experience of temperatures in the 40s and 50s. Rain is expected in and around Missouri this weekend and across the southern Plains the next five days while the northern Corn Belt will be mostly dry with mild summer temperatures. While traders assess this year's less-than-ideal crop conditions, the demand pace for corn has slowed as Brazil's FOB prices are 16 cents cheaper than at the U.S. Gulf. August 10 is the date of USDA's first field-based yield estimate and could set the tone for corn prices the next few months. Until then, December corn continues to trade in its sideways range with support at $3.75. DTN's National Corn Index closed at $3.22 Thursday, priced 41 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 up 0.22 after the U.S. Labor Department said non-farm payrolls increased 209,000 in July, more than expected. The U.S. unemployment rate improved from 4.4% to 4.3%.

Soybeans:

November soybeans were up 1 1/2 cents early, but still holding a bearish tone this week related to Wednesday's rain across Iowa and Minnesota. If we went to court, it would be difficult to find enough evidence to support this week's bearish drop in soybean prices, but anxiety among traders is understandable. Wednesday's rains did offer some timely benefit to Iowa crops, but it was no cure-all and Monday afternoon's Crop Progress report is apt to show only slight improvement in crop ratings. There are also concerns that President Trump is getting ready to challenge China on trade, but until something specific happens, traders have learned to tune out the issue. As with corn, USDA's August 10 report will likely set a tone for soybean prices the next few months and could hold a surprise for prices. The one consistent source of support for soybean prices has been export demand and that continues with soybean shipments up 19% from a year ago, pointing to a lower ending stocks estimate ahead. November soybeans is trading within a wide $1.40 range in 2017 with reasons to avoid the extremes. DTN's National Soybean Index closed at $8.91 Thursday, priced 70 cents below the November contract and down from its highest prices in four months. Among August contracts, there were 6 deliveries of soybeans, 129 deliveries of meal, and 704 deliveries of soybean oil early Friday.

Wheat:

September Chicago wheat was up 2 1/4 cents with early commercial bargain-hunting after prices have fallen to their lowest level in seven weeks. The latest seven-day forecast expects a broad coverage of moderate to heavy showers across the southern Plains which will be helpful for planting conditions in the fall. The Pacific Northwest is hot, but favorable for the remaining rounds of winter wheat harvest. This year's drought on both sides of the border in the northern Plains has been the worst problem for world wheat production in 2017 and will likely bring a modest reduction to world wheat supplies in 2017-18, but overall supplies are still plentiful and winter wheat prices have returned to the site of their pre-drought trading range. Traders probably still have some contracts to unload, but winter wheat prices should be getting close to support. DTN's National SRW index closed at $4.27 Thursday, 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

(BAS)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.