DTN Before The Bell Grain Comments

Morning CME Globex Update:

Soybeans were a little higher, corn and wheat a little lower early Tuesday, possibly pointing to another quiet day of trading ahead. Heavy rains fell over Missouri early Tuesday, causing flooding around Kansas City while more beneficial amounts reached Illinois.

Other Markets:

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

Corn:

December corn was down a quarter-cent after more rain fell in and around Iowa overnight. Tuesday morning's map shows flooding around Kansas City with rains from eastern Kansas to Michigan, catching central Missouri and Illinois in the process. Late Monday, USDA said 76% of corn had reached dough stage and 29% was dented, down from the five-year average of 35% dented for this time of year. 62% of corn was rated either good or excellent, the same as a week ago. The Dakotas showed slight improvement, but 14% of Illinois corn rated poor or very poor, up from 11% last week. It continues to look like this year's crop will be just shy of 14 billion bushels, but enough to keep supplies plentiful in 2017-18. December corn prices remain near their low for 2017 and are vulnerable to more selling as we approach harvest as is often the case this time of year. With this year's corn maturity behind schedule, early freeze is a potential concern, but does not look likely in any of the current forecasts. DTN's National Corn Index closed at $3.12 Monday, priced 37 cents below the September contract and at a new 2017 low. In outside markets, the September U.S. dollar index is up 0.41 with no obvious news to explain the gain ahead of this week's financial gathering in Jackson Hole, Wyoming.

Soybeans:

November soybeans were up 1 1/4 cents early, even though crops were still benefiting from one more day of rain across the central Midwest. Late Monday, USDA said 87% of soybeans were setting pods, in line with their usual pace. 60% of soybeans were rated good or excellent, still showing the lowest DTN Soybean Condition Index in five years. No drastic changes to crop ratings were seen in the major producing states, but the more important note may be that poor-to-very poor ratings are at double-digit levels in nine states. After Tuesday, the best rain chances will be across the southern U.S. while the Midwest remains mostly dry, covered by mild temperatures. On the demand side, FOB soybean prices are 14 cents a bushel cheaper at the U.S. Gulf that at Brazil's ports so U.S. export business is likely to remain active and has helped keep November soybean prices above their June low of $9.07. For now, November soybeans remain under bearish pressure with a record soybean crop still possible this fall. DTN's National Soybean Index closed at $8.75 Monday, priced 62 cents below the November contract and holding above its lows in June.

Wheat:

December Chicago wheat was down a half-cent early, still having a difficult time finding takers at their lowest spot prices in over three months. Late Monday, USDA said 58% of spring wheat was harvested and with little chance for rain in the northwestern U.S. the next seven days, the only potential delay is in Minnesota where there is a chance for moderate showers. It is still possible that USDA's other spring wheat production estimate of 402 million bushels is too high, but even if an adjustment comes, prices aren't likely to show much reaction at this late date. Spring wheat prices should find a higher trading range after this year's drought, but for now, Minneapolis wheat is trending lower while noncommercials bail out of their net longs. Winter wheat prices are back to competing with ample world supplies and have not yet found support for a trading range, but should be close. DTN's National SRW index closed at $3.80 Friday, priced 29 cents below the September contract and at its lowest price in three months.

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

FollowTodd on Twitter @ToddHultman1

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