DTN Before The Bell Grain Comments

Morning CME Globex Update:

Corn, soybeans, and wheat were all higher early Tuesday with prices continuing to find support after weeks of trading dominated by selling activity. Tuesday's weather map is mostly dry across the Corn Belt with summer temperatures staying mild.

Other Markets:

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

Corn:

USDA slightly lowered its crop rating for corn late Monday. USDA said 93% of corn reached or passed silking, 42% had reached the dough stage, and 7% was dented, close to its typical development pace. 60% of corn was rated either good or excellent, resulting in a 1 point drop in DTN's Corn Condition Index, to 143. This is the seventh lowest crop rating since 2000 and still suggests that USDA will lower its yield estimate in Thursday's WASDE report. Tuesday's weather map is mostly clear across the Corn Belt with moderate rain expected around Kansas and Minnesota the next three days while only lighter amounts are in store for the central Midwest and northwestern Plains. So far, December corn has resisted its bearish seasonal tendency and continues to trade sideways, above support at $3.75 with USDA's WASDE report due out Thursday. DTN's National Corn Index closed at $3.31 Monday, priced 41 cents below the September contract and staying within its sideways range in 2017. In outside markets, the September U.S. dollar index is down 0.10 while other commodities are mixed.

Soybeans:

November soybeans were up 8 cents early Tuesday, in spite of a slightly higher crop rating from USDA late Monday. Throughout early trading, futures spreads showed off-and-on evidence of commercial buying in soybeans, meal, and bean oil -- signs of active demand while crops are still showing stress. USDA said 90% of soybeans were blooming, 65% were setting pods, and 60% of the crop was rated good or excellent. DTN's Soybean Condition Index increased four points to 143, making this the seventh lowest rated soybean crop since 2000. This year's record soybean plantings will not see record yields, but Thursday's WASDE report could still show a production estimate in the neighborhood of 4.2 billion bushels. On the other hand, USDA may not acknowledge in Thursday's report, but world demand has been strong enough to justify a lower ending soybean stocks estimate in 2016-17 and that is also helping give soybean prices support in a year when record plantings were supposed to tank prices. Technically, November soybeans remains in an uptrend, above the support of its five-week low. DTN's National Soybean Index closed at $9.02 Monday, priced 68 cents below the November contract and holding sideways, above $8.80. Among August contracts, there were 256 deliveries of soybeans, 176 deliveries of meal, and 70 deliveries of soybean oil early Tuesday.

Wheat:

September Chicago wheat was up 1 3/4 cents early, finding more buying interest near its lowest prices in seven weeks after taking over a dollar off of its July high. Thursday's WASDE report will update USDA's wheat production estimates and there is still room for a lower spring wheat total. Late Monday, USDA said 94% of winter wheat and 24% of spring wheat were harvested, close to their normal paces. Spring wheat's good-to-excellent rating was raised from 31% to 32%, but that kind of minor adjustment doesn't mean much at this late stage. USDA's early estimates of ending world wheat stocks have been too high and some downward adjustment should be seen on Thursday. Overall however, world wheat supplies remain high and demand will have to prove itself in 2017-18. In the meantime, winter wheat prices are low enough to find support for a sideways trading range. DTN's National SRW index closed at $4.34 Monday, 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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