DTN Before The Bell Grain Comments

Morning CME Globex Update:

At 8 a.m. CDT, USDA announced 7.6 million bushels (206,000 mt) of U.S. soybeans were sold to unknown destinations for 2016-17. 7.1 million bushels (180,800 mt) of U.S. corn were sold to Mexico for 2017-18. Before the news broke, corn, soybeans, and all three wheats were starting the week modestly higher with key states in the Corn Belt not expecting much rain the next five days.

Other Markets:

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

Corn:

At 8 a.m. CDT, USDA announced 7.1 million bushels (180,800 mt) of U.S. corn were sold to Mexico for 2017-18. Earlier, December corn was up 3 1/2 cents, continuing to find support at the lower end of its trading range after heavy rains fell over eastern Kansas and Missouri over the weekend while the rest of the Midwest was mostly dry. The five-day forecast has chances for heavy rains in the southwestern Plains and across the Gulf states along with lighter amounts in the northern Midwest. The three I-states will be mostly dry leading up to USDA's WASDE report on Thursday -- the one that will be widely watched with USDA's first field-based yield estimates. Friday's CFTC data showed noncommercials modestly bullish in corn, holding 148,195 contracts net long as of August 1. The main features of the corn market continue to be that adverse weather will likely reduce the size of the 2017 crop, but over 2 billion bushels of old-crop carry is keeping December corn prices contained in their sideways range with support at $3.75. DTN's National Corn Index closed at $3.25 Friday, 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 down 0.05, a slight correction from Friday's gain tied to bullish employment numbers.

Soybeans:

At 8 a.m. CDT, USDA announced 7.6 million bushels (206,000 mt) of U.S. soybeans were sold to unknown destinations for 2016-17. Before the announcement, November soybeans were up 7 3/4 cents, supported by early commercial buying and a $3.90 gain in December soybean meal. This week's five-day forecast has beneficial rains anticipated for Nebraska and Kansas, but not much in store for the Dakotas, Iowa, or Illinois. There may be a small improvement in Monday afternoon's soybean crop ratings from USDA, but judging by 7-day rainfall totals, it is difficult to expect much. The one consistent help for crops lately has been the recent stretch of cooler summer temperatures. Friday's CFTC data showed noncommercials still lightly bullish in soybeans with 54,705 net longs as of August 1, but not largely committed to either side. Thursday's WASDE report will be widely watched for USDA's yield estimate and while yields will likely be below last year's 52.1 bushels, this year's record planting can still produce a big crop of around 4.2 billion bushels. Thanks to support from strong world demand and competitive U.S. soybean prices, November soybeans are chopping in a wide range between June's low and July's high. DTN's National Soybean Index closed at $8.88 Friday, priced 68 cents below the November contract and holding sideways, above $8.40. Among August contracts, there were 343 deliveries of soybeans, 72 deliveries of meal, and 442 deliveries of soybean oil early Monday.

Wheat:

September Chicago wheat was up 2 3/4 cents Monday, helped by an early show of commercial bargain-hunting which suggests that support is near. This week's five-day forecast expects moderate to heavy rains in the southwestern Plains, but only light amounts in the northwestern Plains. That should help planting conditions for next year's winter wheat crops, but hope has been lost for much of this year's spring wheat crop. Thanks to dry weather problems in the northwestern U.S., southern Canadian Prairie, and Australia, world wheat production will be down in 2017 and this is likely one of those rare years when USDA's estimate of world ending wheat stocks is too high for 2017-18, but overall wheat supplies are still comfortable. Friday's CFTC data showed noncommercials still lightly bullish in Chicago wheat, holding 15,513 net longs as of August 1. September Chicago wheat has fallen back into its old sideways range and should be close to finding support for sideways trading. DTN's National SRW index closed at $4.25 Friday, priced 30 cents below the September contract and still above its previous breakout at $4.18.

ToddHultmancan be reached at todd.hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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