DTN Early Word Grains

6:00 a.m. CME Globex:

December corn was down 4 cents, November soybeans were down 4 1/4 cents, and September Chicago (SRW) wheat was down 3 3/4 cents.

CME Globex Recap:

Grain prices were back on the defensive early Tuesday, still facing a wetter forecast for this week which would be especially helpful to pod-filling soybeans, if expected amounts verify. The September U.S. dollar index is higher overnight with more talk of another rate hike. December gold and most other commodities are starting the day lower.

OUTSIDE MARKETS:

The Dow Jones Industrial Average closed 135.39 points higher at 21,993.71, the NASDAQ Composite added 83.67 points (1.3%) to 6,340.23, and the S&P 500 gained 24.52 points (1.0%) to 2,465.84 Monday. DJIA futures were 50 points higher early Tuesday morning. Asian markets were mostly higher with Japan's Nikkei up 216.21 points (1.1%), Hong Kong's Hang Seng was down 75.27 points (-0.3%) and China's Shanghai Composite was up 13.90 points (0.4%). European markets were trading higher with London's FTSE 100 up 27.44 points (0.4%), Germany's DAX up 36.03 points (0.3%), and France's CAC 40 up 20.06 points (0.4%). The euro was 0.0035 lower at 1.1769 while the U.S. dollar index gained 0.32 to 93.62. September 30-year T-Bonds were 22/32 lower at 154'15 while December gold dropped $11.10 to $1,279.30. Crude oil was $0.09 lower at $47.50 while Brent crude lost $0.15 to $50.59. China's Dalian soybeans were modestly lower and Malaysian palm oil futures were down 1.3% overnight.

	BULL		BEAR
1)	The most bullish aspect of corn could be that the market is technically oversold and DTN's national index of cash prices is holding stubbornly above its 2017 low at $3.17.	1)	FOB corn prices are 23 cents cheaper in Brazil than at the U.S. Gulf -- bearish news for U.S. export business.
2)	Weather maps show the past seven days was dry across much of the U.S. Midwest soybean growing area.	2)	Given old-crop soybean sales are running ahead of projections, the market remains vulnerable to possible cancellations.
3)	Winter wheat contracts are holding above their 2017 lows.	3)	Futures spreads in wheat reflect poor demand for front-month contracts.

The weekly Newsom on the Market column can be found on subscription sites only. On DTN Pro it is in News/Town Hall and on MyDTN in News/Columns.

MORE COMMODITY-SPECIFIC COMMENTS

CORN December corn is down 4 cents early Tuesday, staying close to its lowest prices this year with a broad coverage of rain still expected across the Corn Belt this week. Heavier amounts are expected in the western and northern Midwest, but there is always a chance that actual totals will show up differently. Late Monday, USDA said 61% of corn had reached the dough stage and 16% was dented, close to its usual pace of development. USDA increased its good-to-excellent rating for corn from 60% to 62% and it is fair to wonder if crops actually got better or if subjective crop ratings were swayed by Thursday's higher-than-expected yield estimate of 169.5 bushels an acre. More importantly, the short-term trend in December corn remains down, in line with its seasonal tendency, and futures spreads reflect a bearish outlook.

SOYBEANS November soybeans are down 4 1/4 cents early Tuesday, still facing a forecast for more rain across the Midwest this week. If the rains get the broad coverage that is expected, it would be good timing for soybeans, 79% of which are setting pods, according to USDA late Monday. USDA's good-to-excellent rating for soybeans was reduced from 60% to 59% and kept DTN's Soybean Condition Index at its lowest level in five years. One notable change took place in Iowa where the poor-to-very poor rating increased to 15% from 12% last week. With plenty of uncertainty still surrounding the size and condition of this year's soybean crop, the short-term trend in soybeans is down, but noncommercials are roughly neutral and November prices are holding above their 2017 low at $9.07.

WHEAT September Chicago wheat was down 3 3/4 cents early, but is still finding enough support to hold above its 2017 low at $4.30 3/4. Late Monday, USDA said 97% of winter wheat and 40% of spring wheat crops were harvested, near their usual paces. USDA's good-to-excellent crop rating for spring wheat was raised from 32% to 33%, but that does not make much difference this late in the season. It seems difficult to believe that in a year when U.S. wheat production will be down at least 25%, winter wheat prices are already back near their lowest levels in 2017. Commercials have returned to the long side in Chicago wheat, but in the case of K.C. wheat, commercials remain net short with noncommercials slow to liquidate their failed net long positions. The seven-day forecast adds bearish pressure to this week's winter wheat prices, expecting more rain across parts of the southwestern Plains and that is helping to keep the short-term trend pointed down. Overall however, September Chicago wheat should be low enough to find support for a sideways trading range.

	DTN Cash	Change From	National	Contract	Change from
Commodity	Index	Prev Day	Avg. Basis	Month	Prev Day
Corn:	$3.23	$0.03	-$0.39	Sep	$0.007
Soybeans:	$8.73	-$0.06	-$0.65	Nov	$0.003
SRW Wheat:	$4.11	$0.02	-$0.30	Sep	$0.004
HRW Wheat:	$3.69	-$0.05	-$0.68	Sep	-$0.005
HRS Wheat:	$6.27	-$0.04	-$0.43	Sep	$0.000

Todd Hultmancan be reached at todd.hultman@dtn.com

Toddcan be followed throughout the day at www.twitter.com\ToddHultman1

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