DTN Closing Grain Comments

General Comments:

Corn was up 2 cents in the September contract and up 1 1/2 cents in the December. Soybeans were down 5 1/2 cents in the September contract and down 6 3/4 cents in the November. Wheat closed up 1 3/4 cents in the September Chicago contract, down 4 1/2 cents in the September Kansas City, and down 4 cents in the September Minneapolis contract.

The September U.S. dollar index is up 0.38 at 93.33. December gold is down $7.50 at $1,286.50 while September silver is down 1 cents and September copper is down $0.0100. The Dow Jones Industrial Average is up 147 at 22,005. September crude oil is down $1.15 at $47.67. September heating oil is down $0.0261 while September RBOB gasoline is down $0.0300 and September natural gas is down $0.030.

Corn:

December corn ended up 1 1/2 cents Monday, showing a rebound from its 2017 low after last week's higher-than-expected corn yield estimate of 169.5 bushels from USDA. Monday's new seven-day forecast was also bearish for row crops this week as a broad coverage of moderate rain amounts are expected over most of the Corn Belt, including Iowa where increased drought conditions have become a concern. On the demand side, the U.S. has been losing export business to South America lately and that is likely to continue. USDA said 29.8 million bushels of corn were inspected for export last week, enough to keep total inspections up 27% from a year ago with just three weeks left in the 2016-17 season. Friday's CFTC data showed noncommercials still bullish in corn, holding 137,764 net longs as of Aug. 8 -- a position that was punished by Thursday's bearish USDA report and likely got smaller afterwards. Seasonally, it seems too early for commercials to be interested in buying corn, but it is curious that December corn prices are not following through yet on Thursday' new low. DTN's National Corn Index closed at $3.21 Friday, priced 40 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 0.38 and Dow Jones Industrials are up 147 points after the Washington Post reported China agreed to ban imports of iron, lead, and coal from North Korea.

Soybeans:

November soybeans closed down 6 3/4 cents, pressured by a new seven-day forecast which expects moderate temperatures and a broad coverage of moderate rain amounts across the Midwest. If forecast amounts show up as planned, it will be good timing for filling soybean pods, but actual totals don't always match the forecast so traders may be holding back. Monday afternoon's Crop Progress report may show a slightly lower soybean crop rating after last week's rains missed much of Iowa and Illinois. Then again, traders may not be so eager to respond to weekly crop ratings after Thursday's WASDE report surprised the market with higher-than-expected yield estimates. On the demand side, USDA said 20.9 million bushels of soybeans were inspected for export last week, enough to keep total inspections above the pace of USDA's new export estimate. Friday's CFTC data showed noncommercials still lightly bullish in soybeans, holding 41,412 net longs as of Aug. 8, but not heavily committed to either direction. Commercials were net short 4,280 contracts of soybeans and it will be interesting to see if they respond to a lower price at some point or wait until harvest. So far, November soybeans are trading at the lower end of their range in 2017 with a record crop still possible. DTN's National Soybean Index closed at $8.79 Friday, priced 66 cents below the November contract and near its lowest price in over a month.

Wheat

September Chicago wheat closed up 1 3/4 cents Monday, possibly finding long-awaited support which was interrupted by USDA's estimate of record high world ending wheat stocks for 2017-18 on Thursday. Given this year's lower estimated U.S. wheat production total of 1.74 billion bushels, September Chicago wheat falling all the way back to its lowest prices in 2017 seems a little harsh, but Monday's late buying may finally be a sign of the support one would normally expect at these lower prices. The good news for producers is that cash SRW wheat prices are still up 44 cents on the year, hanging on to a modest gain. Friday's CFTC data showed noncommercials have returned to the bearish side of Chicago wheat as of Aug. 8, holding 3,953 net shorts. Commercials were net long 8,504 contracts, once again heading back to their familiar corners and willing to support wheat prices in the low $4s. The latest seven-day forecast expects moderate rains over part of the southwestern Plains which should be helpful for fall planting conditions. South Dakota is expecting rain this week, but it is too late for this year's spring wheat. The rest of the northwestern Plains remains dry, but traders continue to give up on spring wheat prices as September Minneapolis wheat fell another 4 cents Monday to its lowest close since late-June. DTN's National SRW index closed at $4.09 Friday, priced 30 cents below the September contract and at its lowest prices in nearly two months. DTN's National HRW index closed at $3.74, also at its lowest prices in nearly two months.

Todd Hultman can be reached at Todd.Hultman@dtn.com

FollowTodd on Twitter @ToddHultman1

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